Garments Exporters Association demands fiscal relief

21 Jan '13

7 min read

Garments Exporters Association (GEA) has requested the Government to provide adequate fiscal relief for the garment sector of the textile industry to enable it to face increasing international competition.

GEA has pointed out that garment export trade has suffered month after month decline in exports during the period April- December, 2012, as compared to the corresponding monthly figures of the last fiscal year. He further pointed out that we are still way behind our export target of 18 billion $ for the current fiscal year.

GEA has expressed the hope that finance Minister would favorably consider following recommendations made by the Garments Exporters Association while finalizing the Budget proposals for the year 2013-14.

1. Reduction of Transaction cost

Reduce the transaction cost and grant necessary relief for the garment sector of the Textile Industry to enable it to face increasing international competition because of shrinking demand in the major world apparel markets.

The recent depressing developments in international trade and global financial and economic crisis along with slowdown of US and EU economies have further aggravated the international competition posing serious challenges for the Indian Apparel Industry. Apart from this, there have been a number of domestic factors adversely affecting the competitive strength of Indian Apparel Industry.

2. Hike the Duty Drawback Rates by 5%

It is necessary to hike duty drawback rates by 5 per cent by increasing the scope and coverage of duty drawback scheme so as to ensure full reimbursement of Excise duties, Custom duties, education cess and various state level taxes.

3. Restoration of 100% Exemption to Exporters under Section 80 HHC of Income Tax

It is the high time to restore 100% exemption to export earnings under Section 80 HHC of Income Tax Act to boost the efforts being made by exporters to overcome the present serious crisis. This would reduce the serious impact of increasing costs as also help making good of losses arising out of high volatility of Indian Rupee.

4. Exemption of Diesel from Duties and Levies for power captive generation

There is continuous and perpetual shortage of power, leading to curtailment of production. This renders it necessary to encourage captive power generation by providing diesel at International prices and exempted from various duties and levies.

5. Abolition of Customs Duty on Import of Textile Machinery and Accessories

Most of our competing economies allow import of textile and garmenting machinery without Customs duty. It is requested that Customs duty on import of textiles machinery and accessories should be abolished in consonance with the policies of our competing econmies.

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