Union Budget receives thumbs-up from textile trade bodies

11 Jul '14

4 min read

Most of the budgetary proposals mooted for the Indian textile and apparel sector announced by the Finance Minister Mr Arun Jaitley received a thumbs-up from various textile and garment sector trade bodies.

However, the one point on which textile trade bodies have raised their apprehension is imposition of excise duty on polyester fibre made from recycled plastics or PET water bottles, which if not recycled, would land in landfills and create environmental destruction.

Mr Manikam Ramaswami, Chairman of Texprocil opines that introduction of excise duty on polyester produced from waste is a serious retrograde step. Recycling of waste plastics and pet bottles into fiber helps waste realize a high enough price to encourage separation of this dangerous non bio-degradable waste from bio- degradable digest-able waste.

He adds, “The high price the waste gets makes this expensive segregation of waste a viable activity. Levying excise duty on the fibers produced will increase crude consumption and reduce waste segregation activity which is detrimental to the environment. These retrograde steps of creating inverted duties and not reducing existing inverted duties need to be done away with at the earliest.”

Mr Ramaswami however welcomed the focus on poverty reduction, agriculture, etc, which will help the poor have more disposable income, an essential for the Indian textile industry. He also hailed the focus on agriculture and organic cultivation, urban waste conversion into organic manure, which will further strengthen India's pre-eminent position as the world's largest organic textile producer.

Mr Prem Malik – Chairman of Confederation of Indian Textile Industry (CITI), too requested the Finance Minister to withdraw the excise duty of 6% on PSF and PFY manufactured from plastic waste and scraps. He pointed out that such regenerated fibres are extensively used in the textiles industry and as a basic raw material and the excise exemption on it has been adding to the competitiveness of the textiles industry.

Mr Malik hailed the proposal to extend investment allowance of 15% on investments of more than Rs 25 crores on plant and machinery and the proposal to develop an entrepreneur friendly bankruptcy framework for SMEs would be helpful to small units in the textiles industry. He however requested that the bankruptcy framework may also be extended to larger units.

Mr T Rajkumar, Chairman of the The Southern India Mills’ Association (SIMA) thanked the government for extending the optional route of CENVAT on textiles, which was one of the demands of the industry till GST is implemented to maintain a level playing field. Mr Rajkumar also welcomed the announcement of exempting cotton transport loading and unloading services from the purview of service tax, which offers considerable relief to the industry and also to cotton farmers.

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