Friday, March 16, 2012, New Delhi: The Confederation of Indian Textile Industry (CITI) has welcomed some of the announcements included in the Central Budget presented by Shri Pranab Mukherjee, the Honourable Finance Minister of India today. In a statement here, Shri S.V. Arumugam, Chairman, CITI stated that abolition of the custom duties on automated shuttleless looms and its parts is a welcome move since weaving industry in the country needs urgent modernization. He added that the concessional rate of 5 per cent custom duty applicable to several other machines have been retained for new machines but increased to 7.5 per cent for second-hand machines. Shri S.V. Arumugam stated that this is a welcome move.
Shri S.V. Arumugam also welcomed the proposal to establish two more mega handloom clusters and one mega powerloom cluster. He also welcomed the encouragement for some of the vulnerable segments by way of a package for loan waiver for handloom weavers and a pilot project for geo-textiles for North East. He added that while CITI’s request for removing excise duty on branded garments and made-ups has not been incorporated in the Budget, the effective rate of excise duty for these products has been reduced from 4.5 per cent to 3.6 per cent of sales price, which is welcome.
Shri S.V. Arumugam also welcomed the focus in the Budget on skill development since this an important area for the textile industry.
While CITI had requested for removal or reduction of excise duty for man-made fibres, the duty has gone up from 10 per cent to 12 per cent. Shri S.V. Arumugam observed that though the increase is part of increase in the standard rate itself, it would make the man-made fibres of India less competitive compared to our competing countries. Referring to the increase of excise duty for man-made fibre-based textile products to 12 per cent and others to 6 per cent, Shri S.V. Arumugam stated that the increase may not have a major impact on the industry since the optional route has been continued.
In the case of service tax, Shri S.V. Arumugam observed that increase of the rate from 10 per cent to 12 per cent in itself would have an adverse impact on the industry. In addition, several services which were exempted would now become taxable as negative list consists only of 17 services.
Observing that Central Budget has no reference to the Technology Upgradation Fund Scheme (TUFS), Shri Arumugam hoped that a separate announcement would be made by the Government for extending TUFS to the 12th Five Year Plan.