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Heeding industry's demand, govt raises duty on polyester fabrics to 20%

The industry had made representations to the government and the GST Council to increase the basic customs duty on fabrics to retain the competitiveness of the domestic manufacturing industry

T E Narasimhan  |  Chennai 

Photo: Shutterstock
Photo: Shutterstock

The government has decided to increase the basic customs to 20 per cent from 10 per cent. Industry experts said this would retain the competitiveness of the domestic industry.

The increase will be with effect from October 27, 2017.

Under the (GST) regime, countervailing duty (CVD) has been replaced with IGST and the special additional duty has been scrapped. attracted 10 per cent basic customs duty, 12.5 per cent CVD and four per cent special additional duty under the pre-regime. 

Consequent to the scrapping of four per cent additional duty and levy of five per cent on polyester fabric, the imported attracted 10 per cent and five per cent IGST.

There was a significant drop in the import duty, threatening the survival of the domestic industry due to cheaper imports, especially from countries like China. The industry had made representations to the government and the Council to increase the on fabrics to retain the competitiveness of the domestic industry. In this backdrop, the was increased.

P Nataraj, chairman of The Southern India Mills' Association (SIMA), said that increasing the on polyester fabrics would encourage the Make in India programme. 

He stated that since man-made fibre price in India is higher by 20-30 per cent due to the high incidence of duties and levies, there was a threat of cheaper imports from countries like China. The chief added that the increased would reduce imports. 

He also said that there was a need to increase the import duty on cotton on par with in the interest of the powerloom and handloom sectors to sustain their competitiveness.

First Published: Mon, October 30 2017. 10:35 IST
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