CITI places pre-budget memorandum before Finance Ministry

SERVICE TAX

Exemption limit for service tax may be increased from the current Rs.10 lakh to Rs.15 lakh and the rate of service tax may be reduced to 10 percent from the current 12 percent in order to reduce the tax burden on the industry.

INCOME TAX

Accelerated Depreciation of 80 percent for wind mills may be restored. The Accelerated Depreciation of 80 percent was reduced to 15 percent from April2012. A large majority of wind mills in the country serve the textiles industry, especially in areas like Tamil Nadu where textiles industry is facing serious power problems. Restoration of AD at 80 percent will help to push up investments on wind mills and ensure affordable and eco-friendly power supply for the industry.

EXPORTS

Lending of export credit to textiles sector may be treated at par with lending to the priority sector in the matter of interest rates. Textiles industry is highly export oriented, with over 35 percent of its production getting exported. Thus, over a third of the 35 million workers employed in the industry are also dependent on the industry’s export competitiveness.

The industry suffers disadvantages in the areas of infrastructure and input costs when compared with its competitors. Affordable export credit will assist in handling these problems partly.

Confederation of Indian Textile Industry