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Packaging
Highlights
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Exemption withdrawn on carton, boxes, containers and cases
of corrugated paper or paperboard. They will now attract
normal CENVAT of 16%.
| Budget
Impact |
| Excise |
 |
Customs |
 |
Policy
Tax |
 |
The concessions
granted to the FMCG industry is expected to trickle down to
the packaging industry. The industry will also benefit from
the reduction in corporate and dividend tax.
However,
the withdrawal of exemption of excise duty on carton boxes,
container and cases of corrugated paper will have a marginal
negative impact on the packaging industry.
Outlook
In the last five years the industry has recorded a CAGR
of 10- 20%. However, in the last six months the growth has
almost flattened. The main problem of the industry is overcapacity
. The margins of the industry are under great pressure because
of the increase in raw material prices which the industry
players are not able to pass on to the final consumers.
The
growth of packaging industry is directly related to the
FMCG growth. It is expected that the revival in FMCG will
also help revive the packaging industry.
| Voices |
| The
positive impact of food processing industry will trickle
down to the packaging industry. The reduction in corporate
and dividend tax will certainly benefit the corporate
world.
M
K Srinivasan, Sr.V.P.Finance, Paper Products
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