Home / Knowledge / News / Apparel/Garments / New VAT, Source Tax structures remain concern for RMG sector
New VAT, Source Tax structures remain concern for RMG sector
24
Jun '11
As a residue of the recent budgetary announcements for the year 2011-12 by Bangladeshi Finance Minister, Ready Made Garment (RMG) sector figures crisis on the face of several revised taxes structure in the budget this time.

RMG associations and players regard the post budget tax structure, to be imposed on the industry, not affordable and needs revision by the Government.

Amongst several important taxes as announced in the budget, the 0.4% Source Tax levied on apparel sector and 0.5% on others, has been increased to 1.5%.

Associations and RMG exporters believe this to be an increased burden when there already exist big issues of electricity and gas shortages to be confronted.

Reasoning for the worry, as expressed to Fibre2fashion, Mr Nasir Uddin Chowdhury, MD, Eastern Apparels Ltd, speaks-“At the moment, this increase is not bearable for, though we have achieved a growth of 42%, it is not actually growth being of inflated kind due to raised material cost. In turn, the Freight on Board (FOB) price is raised and hence total value is increased by 50%. Since our FOB has increased, everywhere our expenditure goes up. On the port we are paying charges on the total value; in the banks we are paying charges on the total value; on the insurance we are paying on the total value; and so on.”

Mr Chowdhary also points out that Small and Medium Enterprises (SMEs) that constitute 60% of country's total industrial share and have around 400 machines facilitations, are under tremendous pressure allied to electricity and gas dearth to run the mills. In addition, if VAT 9% is levied, it will bash industry to closure.

Mr Abdus Salam Murshedy, President, Exporters Association of Bangladesh, also attributes the increase in the Source Tax to be a detrimental step in the healthy growth of the industry. Besides this, in his view, 9% VAT for apparel, though being rudimentary in principle, is adding to the woes of the sector in current context when internationally, market is weak with reduced purchasing power, not completely out of recession as well.

Apart from that, the president observes that the steep rise in cotton prices followed by sudden fall unprecedented, has left the sector shaken and in turmoil, especially for his country that is not self reliant in its cotton requirements. Even the interest rates in the banks are on the higher side, he notices.

Urging to the policy makers to reconsider revision in these tax structures, the representative aspires – “We are hopeful that the Government will realize the difficulties faced by the industry and take necessary steps for amendment, thereby promoting growth in the International market in not only textile and apparel sector but other sectors like engineering, pharmaceuticals, IT, construction & infrastructure, etc.”

Fibre2fashion News Desk - India


Must ReadView All

India’s garment imports from Bangladesh up 56% post-GST

Apparel/Garments | On 12th Dec 2017

India’s garment imports from Bangladesh up 56% post-GST

India has imported $87.4 million worth of readymade garments from...

Coats acquires yarn manufacturer Patrick Yarn Mill

Textiles | On 12th Dec 2017

Coats acquires yarn manufacturer Patrick Yarn Mill

Coats, the world’s leading industrial thread manufacturer, has...

Trade & consumers want MDR free digital payments: CAIT

Apparel/Garments | On 12th Dec 2017

Trade & consumers want MDR free digital payments: CAIT

Transaction charges like the merchant discount rate (MDR) applicable...

Interviews View All

Top executives
Textile industry, India

The event should be organised every year

Divyesh Mashruwala
Akshar Industries

Surat dominates foiling, embossing and pleating

Mohammad Mamun Ar Rashid
UL VS Bangladesh Ltd

Productivity, creativity and innovation play a vital role in the growth of ...

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Hardik Sanghvi

Idealin Fogging Systems has been engaged in designing and manufacturing...

Harmeet Singh

New Delhi-based Jogindra Industries Private Limited provides an assortment ...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

December 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.2%
No
12.1%
Skip
18.7%

Total Votes: 91

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.5%
No
30.8%
Skip
7.7%

Total Votes: 91

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
86.8%
No
9.9%
Skip
3.3%

Total Votes: 91

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
81.3%
No
8.8%
Skip
9.9%

Total Votes: 91


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search