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CMAI urges Govt to reduce import duty on garment machinery
11
Feb '08
Mr. Rahul Mehta,President, The Clothing Manufacturers Association of India (CMAI), in a pre-budget memorandum sent to the Hon'ble Union Finance Minister, has urged that import duty on all machinery for use in the garment industry and accessories should be charged at a fixed 5% duty, without CVD or any other charges.

He further stated that the appreciation of the Rupee Vs. Dollar has further lowered the earnings of Indian Exporters, whereas those of our Asian Competitors have either appreciated less or even depreciated.

As a result, prices of Indian garments have become uncompetitive as compared to offers by our Asian counterparts. The recent increase in duty drawback rates has helped to some extent but the major burden of state & corporation levies continue to hinder exports.

These collectively work out to approx. 6% of the FOB value. He urged that in the ensuing budget, Govt. should exempt export from all direct and indirect taxes (rather than pay and later refund).

CMAI also suggested that the introduction of VAT was expected to reduce prices but since fabric has not been included in VAT, garment units are not able to offset taxes & duties paid on inputs.

The Govt has placed imports of secondhand clothing (worn clothing) on the restricted list with 15% import duty calculated on the weight of the garment. Importers import fresh clothing in the garb of worn clothing since such clothing are discarded after being used once or twice.

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