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Comments of GEA President on the Budget
02
Mar '11
Expressing disappointment for lack of any special provision for the garment sector in budget proposals for 2011-12, Mr.Rakesh Vaid, President, Garments Exporters Association regretted that the Budget has proposed to convert the optional levy into a mandatory levy at a unified rate of 10 per cent for readymade garments and made-ups of textiles which were earlier under an optional excise duty regime, which would adversely affect the garment sector of the textile industry. Although, CENVAT credit of inputs and services would be available the garment factories will now have to register themselves with central excise, increasing the transaction and administrative costs. It would also lead to unnecessary harassment and delays in handling time bound export shipments, said Mr Vaid.

Although, the Finance Minister has dexterously handled the tedious task of striking a balance between the needs of development and social and political compulsions of the UPA Government and the present economic situation, the exporting community feels being left in the lurch without an adequate fiscal relief in the Budget proposals. While giving emphasis on agriculture, social sector, education, skill development, health and infrastructure, the industry and trade, unfortunately, have been neglected.

Mr Vaid pointed out that GEA Pre-Budget recommendations requesting the Government to grant necessary fiscal and commercial relief to garment sector of the Textile Industry has not received favourable response in the Budget proposals announced by the Union Finance Minister. Garment Exporters were infact expecting major policy initiative and adequate fiscal relief to enable them to overcome the present crisis being faced by them. The Budget proposals are therefore, very much short of exporting community expectations.

However, Mr Vaid has welcomed the proposals to reduce the basic customs duty on certain textile intermediates and inputs and specified inputs for manufacture of certain technical fibre and yarn.

Mr Vaid has also welcomed the proposal to introduce scheme for refund of taxes paid on services used for export of goods and new initiatives to reduce the transaction time and costs for exporters as recommended by the Task Force on Transaction cost in Exports.

Garments Exporters Association

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