Whilst being disappointed at being included in the general increase of excise duty from 10% to 12%, the Clothing Manufacturers Association of India (CMAI) President, Mr Rahul Mehta, appreciates the decision of the Hon'ble Finance Minister to increase the abatement on excise duty on branded garments from 55% to 70%.
This is an acceptance of CMAl's persistent Representation to the Union Government that the marketing cost in our industry is much higher than the abatement in place till now. However, there is a strong case for the garment industry to be placed in the 'Necessity' rate of duty.
After all, we cannot see the logic of mobile handsets, cruise liners, and jewelry being taxed at a lower rate than garments, which are used by the Poorest Section of Society.
If at all, the government could even consider having 2 or 3 slab rate structure as it does in the case of the footwear industry, with garments till the MRP of Rs 799/- being in the Necessity Slab.
CMAI would continue to urge the Union Government to consider me enormous employment potential of the garment industry, especially for Semi Skilled and Un Skilled Workers, and that too for Women, and provide further relief for the industry which is going through a rough patch at this time - especially in the wake of duty free imports from Bangladesh.
Other than the change of ED Rate on garments, there appear to be, a few positives in terms of import duty concession for shuttle less looms and further encouragement to clusters.
Clothing Manufacturers Association of India (CMAI)