NEW DELHI:
The Government is likely to abolish textile committee cess for all textiles and textile machinery to improve global competitiveness of Indian companies and attract greater investments into sector.
The cess presently levied at 0.05 percent on ad valorem basis was earlier scrapped for readymade garments in January this year.
The Textiles Ministry has exempted textiles and textile machinery from paying this cess.
Government had collected Rs52 crore in 2005-06 through textile committee cess. Now companies will save this amount and benefit will be enjoyed by units manufacturing fabrics and other types of textiles besides textile machinery, such as looms.
"Exemption from the cess will provide the textile industry financial relief and help generate more investment, employment and exports," a Government source said.
Government is looking at long-term implications at global stage where China's domination continues to grow while smaller players like Sri Lanka and Bangladesh are posing stiff challenge to Indian industry.
The shortfall would be met by increasing the committee's revenue from its services and any further shortage would be met by grants from the Centre.