Handmade soap makers seek Excise exemption

Chennai, Mar 7 (UNI) The Tamil Nadu Small Scale and Tiny Soap and Detergent Manufacturers Association has urged the Centre to withdraw the 16 per cent Excise Duty on handmade soaps proposed in the Union Budget 2006-07.

Talking to newspersons here, Association President V S Krishnan said the levy posed serious threat to hundreds of small and tiny units engaged in soap making without the aid of power.

If the Excise Duty was not withdrawn, it would lead to closure of about 500 units located mostly in rural and backward areas in the state and render nearly three lakh people jobless.

While one lakh people, including large number of women, were directly employed in the units, the industry provided indirect employment to two lakh people.

The tiny and small units can have a level playing field only if they continued to be given exemption from Excise Duty.

"In the absence of tax advantage on handmade soaps, it will be very difficult for the units to survive in the market competing with multinationals," he said.

The handmade soap manufacturers had been enjoying the duty exemption since 1960s. When the benefit was withdrawn for the first time in 1994-95 by then Finance Minister Manmohan Singh, the association made a representation and the duty exemption was restored, Mr Krishnan noted.

Association Secretary V P Asokan said the Centre, while wanting to protect the rural people by creating more job opportunities, could not impose the duty on handmade soap units which provide employment to a number of people from villages.

UNI