Garmenters reject FM's new proposal, resume strike

25 Mar '11

2 min read

The garment manufacturers in the country have gone on an indefinite strike from March 24, to protest the proposed levy of 10.3 percent excise duty on 45 percent of the MRP value of their goods, in place of 60 percent.

Alongside, more than 100,000 garment producers would also organize “non-stop protest rallies” throughout the country.

Pranab Mukherjee, the Finance Minister, had recently revised excise duty of 10.3 per cent payable by manufacturers to 45 per cent of the MRP value. However, the garment makers have rejected the proposal and are protesting the levy.

The garment makers are claiming that, reduction in the MRP value for duty imposition from 60 to 45 percent is actually not a relief but just a rectification of the Finance Ministry's miscalculation.

The producers' selling price usually comes to 35 to 45 percent of the MRP, and as it is well understood that the excise duty is a 'tax on manufacturing', the recent move is just a rectification to levy the duty on producer's selling price. It is no relief as the excise duty still prevails at 10.3 percent of the producer's selling price.

The industry outlook is that, as the food inflation in the country rose to over 10 percent during last one year, while the annual inflation in clothing also increased to around 30 to 50 percent, and it is in these areas where the common man was seeking some relief.

But instead of providing that relief, the government, with such duty imposition has induced a further inflation rise of around 10 to 15 percent.

The industry claimed that, the branded apparels are not exclusively meant for the rich and elite class, as the clothes vended on the road side are also branded. Further that, it is not advisable to promote non-branded apparels as there is no guarantee of quality, which is detrimental to the interest of the consumers.

Fibre2fashion News Desk - India

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