Budget will improve overall textile sector says Sanjay Lalbhai
28 Feb '06
2 min read
"Textile Industry which has been identified as one of the thrust sector with job creation opportunity has been undergoing substantial changes in its indirect tax structure," says Sanjay Lalbhai, Managing Director, Arvind Mills Ltd.
"Cotton textile is already having optional excise duty whereas non-cotton or synthetic fibres were attracting 16% excise duty.
Thus spun-yarn and blended fabrics had a distinct disadvantage over cotton textile.
With reduction in excise duty from 16% to 8% and import duty on man-made fibres from 16% to 10% has fully removed the disadvantage and brought in the parity.
This will encourage production of spun yarn and blended and improve their competitiveness both for the domestic and the export market.
The increase in the budgetary support to Rs. 535 Crore from Rs. 435 Crore will cover the likely investment under TUF Scheme for the textile industry.
The thrust on infrastructure would certainly help in improving the overall efficiency and should benefit the textile industry also but industry continues to suffer from high cost structure compared to their counterparts in China, Pakistan etc.
We welcome deciding the date of implementation for GST by 1st April 2010 which will be a major consolidation and simplification of the indirect taxes and will help the manufacturing sector in attaining competitiveness.
But VAT is required to be extended to the textile sector.
The additional countervailing duty of 4% on imports would add to the burden for the textile industry as most part of the industry has opted out of payment of excise duty and would be an additional cost as industry will not be able to avail credit of the duty paid.
The industry is experiencing severe cost pressures and would have definitely welcomed definite plans on internal reforms mainly power, cost of energy, labour, etc.
The economy is in good health and the GDP growth of 8.1% and resurgence of manufacturing sector with 9.2% is an outcome of various initiatives and economic reforms."
marketing@alchempro.com
