Textile industry expects new schemes in Union Budget 2015

 

Retail solutions

The textiles industry is eagerly awaiting Union Budget 2015 as it is likely to unveil several new schemes and benefits for the industry. Introduction #

The retail sector holds immense scope for development, especially in e-commerce. There should be clarity over foreign direct investment (FDI) in retail, according to Harkirat Singh, managing director of Woodland. Foreign investors have repeatedly demanded tax and labour reforms, especially on retrospective taxation. Reforms are much needed for the ease of doing business in India.

 

Implementation of the goods and services tax (GST) will be welcomed in the retail industry. It will enhance consumption and control prices, as transactions would be devoid of the cascading effects of taxes, says Singh. It will bring the much-required certainty to the industry, removing various indirect tax inefficiencies. He expects the long-standing problem of minimum alternate tax (MAT) and dividend distribution tax (DDT) to be resolved in this Budget, along with some ground rules for the development of the e-commerce industry.

 

Rahul Mehta, president of Clothing Manufacturers Association of India (CMAI), who is also managing director of Creative Group, advises: “Slot the textiles industry in the merit list of GST when introduced, with duty neutral effect.”

 

Modification in taxation

The Indian textiles industry by and large is against disparity in the excise duty levied on man-made fibres and cotton, and wants this to be brought down. “Cotton is a rich man’s fibre,” claims SC Kapoor, director general of the Association of Synthetic Fibre Industry (ASFI). He wants the disparity to be removed as that is detrimental to the development of the man-made fibre industry. Prashant Agarwal, joint managing director of Wazir Advisors, on the other hand, proposes an excise duty reduction on synthetics from 12 per cent to 6 per cent.

 

The textiles industry worldwide is seeing a downfall due to various reasons, and India is no exception. The last few years were tough because of economic instability. There have been no new, good schemes announced by the government. With a new government in place, all business clusters are seeing positivity in the market, as the government is considered business-friendly. There are hopes of seeing an upward trend, believes Abhinav J Garg, group director of Tribeni Group. He emphasises on giving tax benefits to manufacturing companies. The focus should be on three key elements – Make in India, GST and improving infrastructure, so that business can become lucrative.