IIA urges Indian govt to rollback excise on garments

27 Feb '12

2 min read

Indian Industries Association (IIA), an apex representative body of Micro, Small & Medium Enterprises (MSMEs) with a strong membership base of more than 4500 micro, small and medium scale units, has urged the Government to rollback the excise duty on garments to protect the Indian apparel industry.

In its pre-Budget recommendations, IIA has suggested raising of exemption limit of central excise duty from the present Rs. 15 million to at least Rs. 20 million. It has also sought an upward revision of the figure in para 2(vii) from Rs. 30 million to Rs. 50 million.

The Association has suggested the Government to restore the fiscal stimulus by reducing general rate of excise duty to 8 percent.

In addition, the IIA has said that all the exempted 120 commodity groups that have been brought under the excise net should be subjected to one percent rate of duty, along with all the benefits of CENVAT credit to the manufacturers as well as the buyers, to ensure there is no cascading effect, even if the duty is as little as one percent.

The association pointed out that the Central Government has imposed excise duty of 10 percent on branded garments in Budget 2011, and then from September, it has allowed garment imports from Bangladesh at zero-duty. This, the IIA said, has made garments imported from Bangladesh cheaper by up to 15 percent compared to garments manufactured in the country, which is adversely affecting India's garment industry.

Hence, the Government must rollback the excise duty on garments to protect the domestic garment industry, it said.

Fibre2fashion News Desk - India

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