The branded clothing sector got a jolt on February 28, 2011. They were hit by an unexpected whammy from the Finance Minister - Mr Mukerjee, who proposed a mandatory 10% excise duty on branded clothing.
Clothing producers across Indian are agitated by the decision of the Finance Minister. A huge rally has even been proposed by the Gujarat Garment Manufacturers Association (GGMA) today in Ahmedabad to protest against the levy.
Mr Premal Udani, Chairman - Apparel Export Promotion Council (AEPC) while speaking exclusively to fibre2fashion, too was highly critical of the proposal. AEPC represents around 7,500 clothing exporters from India.
He said, “Overall budget is good but there is not much for the textile sector. There have been slight reductions in duties of technical yarns and some inputs, but they are very symbolic. 2.5% reduction is not really going to make a big difference, but is still a welcome step”.
“However imposing mandatory excise duty on branded apparel is the biggest negative. Many may not be aware that, earlier too, the government sought to impose these duties, but withdrew because of procedural problems”, he informed.
He added, “Garment manufacturing is not a normal production activity, as it is not straight-line production. There are too many processes involved which necessitates, raw materials being sent out of factory gates at various times.
“So it is not possible to keep an accurate check and moreover exports in any case is exempt under the current rule, but we still have to go for registration of units and maintain records, which will in itself, become a big problem”.
“The government should have actually called a meeting of all stakeholders and discussed the feasibility of proposing this levy. We have appealed to the honorable finance minister to withdraw the duty with immediate effect”, he concluded by saying.
Fibre2fashion News Desk - India
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