Service Tax from 10 to 12 percent increased in Budget 2006-07 by P Chidambaram, Indian Finance Minister would create difficulties for exporters as they were not protected by CENVET, stated Sudhir Kharbanda, President, Garment Exporters' Association (GEA).
He also said that Budget has not offered enough fiscal relief to the exporters.
Kharabanda, therefore, requested the Ministry to provide incentives including higher duty drawback rates, adequate and need-based funds to exporters at a reasonable rate of interest and assured labour reforms with flexible laws to prepare the Indian textile industry to cash on quota-free world.
President has complimentary words also for Chidambaram as he declared some favorable proposals for the textiles industry.
Kharabanda hoped that increase in Technology Upgradation Fund (TUF) from from Rs435 crore to Rs535 crore and the Rs189-crore provision for Integrated Textiles Parks (SITP) will fetch more investment in textile industry.
Reduction of excise duty on all man-made fibre yarn and filament yarn from 16 percent to 8 percent and import duty on all man-made fibres and yarns from 15 percent to 10 percent were also steps in the right direction and would improve price competitiveness of Indian products, he added.
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