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Sector Focus : Soaps and Detergents

Soaps and detergents: State of the industry (2000-01)

Toilet soaps Demand for toilet soaps is expected to increase at 3 per cent as compared with that in 1999-2000. The growth in the premium category was higher, at around 8 per cent. Growth in demand was low due to the existing high levels of penetration in the soap market.

Detergents

  • Demand for detergents is expected to increase at 4 per cent as compared with that in 1999-2000. In the fabric wash market, the share of detergent powders/bars increased, while that of laundry soaps declined.
  • Raw material costs of detergent manufacturers increased by 7 per cent as compared with those in 1999-2000.

Soaps and detergents: Industry expectations from the Union Budget (2001-02)

  • An increase in the abatement levels: The Indian Soap and Toiletries Makers Association (ISTMA) has asked for an increase in the abatement levels, from 35 per cent to 44 per cent.(Excise duty = MRP on product multiplied by (1 less abatement rate) multiplied by excise duty rate)
  • A reduction in the custom duty on industrial oils: ISTMA has asked for a reduction in the customs duty on industrial oils, from 44 per cent (including a basic duty of 35 per cent, surcharge of 10 per cent and special additional duty of 4 per cent) to 20 per cent.
  • A reduction in the customs duty on LAB: ISTMA has asked for a reduction in the customs duty on raw material, linear alkyl benzene (LAB), from 25 per cent to 15 per cent.

Soaps and detergents: Duty structure

(per cent)

Excise

Customs

 

1999-2000

2000-01

1999-2000

2000-01

Toilet Soaps & Detergents

16

16

40

44.0

Laundry Soaps

8

16

40

44.0

Notes

  1. For 2000-01, the landed cost and customs duty include the SACD of 4 per cent, effective since 1999-2000. In 1999-2000, the SACD was applicable only for non-traders, and hence, has not been included in the customs duty.
  2. The excise duty is applied on the maximum retail price, after reducing an abatement of 40 per cent
Source: Central Excise and Customs Tariff

Rediff-CRISIL Budget Impact Analysis
Budget 2001

Disclaimer: CRISIL has taken due care and caution in compiling this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of its web site.

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