Dyes and pigment sector was sidelined by the Union Budget 2009-10; players with exports to benefit from extension of time limit for interest subvention on pre shipment credit.
The following changes in the duties have been proposed in the Union budget 2009-10:
- Minimum Alternate Tax (MAT) to be increased to 15% of book profits from 10%. The period allowed to carry forward the tax credit under MAT to be extended from seven years to ten years
- Fringe Benefit Tax (FBT) on the value of certain fringe benefits provided by employers to their employees to be abolished.
- Introduction of the Goods and Services Tax (GST) with effect from 1st April, 2010
Industry expectations - not fulfilled
None of the expectations were fulfilled by the industry
No sector specific announcement was made in the budget 2009-10. So it has a neutral impact on the sector.
Stocks to watch
The dyestuff industry is at a threshold of momentous change where individual companies can either grow and become stronger or can flounder in the changing environment. The changed environment is due to various factors viz. legislations like REACH, CWC etc or shifting of markets from the west to India and China; uncertainties regarding the US dollar.
Indian dyestuff sector has scaled up exports in the recent times. They will benefit from extension of time limit for interest subvention on pre shipment credit. Union Budget 2009-10 is neutral to dyestuff sector as there are no sector specific announcements.