FM reduces customs duty on specified textiles

Reduction in basic customs duty on specified textiles, including fibres, yarns and fabrics, has been proposed by finance minister Arun Jaitley while presenting Union Budget 2016-17 in Parliament today.

The minister proposed cut in basic customs duty on specified fibres and yarns from the existing five per cent to 2.5 per cent. This will benefit both importers and exporters of these fibres and yarns.

Basic customs duty on import of specified fabrics (for manufacture of textile garments for export) of value equivalent to one per cent of FOB value of exports in the preceding financial year has been exempted subject to the specified conditions.

Jaitley also proposed that tariff value for calculating excise/CVD on readymade garments and made up articles of textiles to be calculated at 60 per cent of retail sale price instead of the existing 30 per cent of retail sale price.

The Budget proposes to increase excise duty on branded readymade garments and made up articles of textiles of retail sale price of Rs 1,000 or more from nil to 2 per cent (without CENVAT credit) or from 6 per cent/12.5 per cent to 12.5 per cent (with CENVAT credit).

Similarly, excise duty on PSF/PFY, manufactured from plastic scrap or plastic waste including waste PET bottles, is proposed to be hiked from 6 per cent to 12.5 per cent (with CENVAT credit), while keeping it unchanged at 2 per cent without CENVAT credit. (RKS)