Trade bodies welcome increase in input duty reimbursement
One of the worst hit sectors in India, the textile and apparel industry can look forward to some additional incentives in the forthcoming trade policy to be announced shortly, in the form of an increase in input duty reimbursement.
This incentive will help the exporters in the sector to be more competitive. In the previous budget the sector was given an extension in the export credit interest subsidy and was allocated a higher sum for the technology up-gradation fund.
Commenting on the decision, the Secretary General of the Garment Exporter's Association, Mr Surinder Anand said that, “The garment exporters have welcomed the proposals of Ministry of Commerce to revise upward duty drawback and DEPB rates by increasing the input duty reimbursement to textile exporters”.
“The Garments Exporters Association in its Pre-Budget recommendations and Post-Budget comments had demanded 5% hike in duty drawback rates by increasing the scope and coverage of duty drawback scheme so as to ensure full reimbursement of excise duties, custom duties, service tax and education cess”, he added by saying.
“The Government must also take into account the changes in taxes announced in the Union Budget proposals and also impact of enhanced levies on cotton and man-made fibre”, he concluded by saying.
Mr DK Nair, Secretary General of the Confederation of Indian Textile Industry (CITI), said, “The global economic slowdown has brought down demand for textile products in our major markets like USA, Canada, EU and Japan. Their total imports are declining and so are their imports from India. Our textiles industry needs some hand holding by government in these difficult times”.
“China, Pakistan and the other major textile exporting countries have been increasing the export incentives for their textiles and clothing exporters substantially, in the context of the global slow down. In India, on the other hand, export incentives for textile products have been reduced, after the global slowdown started”, he added by saying.
He explained by saying, “Currently our exports of textile products are registering a negative growth of 10 percent or more every month, compared to the same month of last year. If our exports have to be revived, our export incentives have to improve, if not match what are available to our competitors.
“Central Government has been charging a Special Additional Duty of Customs at 5% on imported products, towards state level duties charged on similar products sold in the domestic market. Thus, government accepts that 4% duty is charged at state level, on an average. All duties charged on exported products are required to be reimbursed to exporters, as per domestic practice and international norms.
“But this is not done in India, in the case of State level duties. If this anomaly alone is rectified, at least for the highly labour intensive textiles and clothing, the draw back rates for these products will go up by 4% and this will be of great help to revive our exports of textiles products”, he concluded by saying.