CII urges tax breaks for garment exports

Karnataka government has been urged by Confederation of Indian Industry (CII) to offer tax breaks on exports upto 2011 and to provide value added tax (VAT) exemption to the textile and garment exporters.

The recommendation is part of CII's vision document for textilesogarment industries in Karnataka. It has added that the government should bring accessories such as machinery spares, buttons, printed paper labels, fusible tapes, hook and eye thick, polyester interlining, industrial type vacuum ironing table with press and such other products under a uniform VAT of 4 per cent instead of the present 12.5 per cent.

Similarly, the government should consider exempting the entry tax on diesel oil and furnace oil and levy a VAT of 4 per cent instead of 12.5 per cent, said the vision document.

The entry tax on capital goods, raw materials and packaging material, and the special entry tax on capex must be also exempt. The power rate should be fixed and there must be exemption in tax of power charges. CII has further said the government can consider waiving of stamp duty for registration of land and registration of rental deeds for the garments industry.

Considering that there are a huge number of units in the unorganised sector and the indirect employment opportunities are as high as 1:1, the industry can significantly increase the employment opportunities in the state.

CII has also called for improving the quality of labour through skills development and enhancement and provide better quality of life for workers and their families.

On the labour reforms front, CII says that the Essential Service Maintenance Act and the Contract Labour Exit Clause should be made applicable to the garment industry. Since the textile and garments industry is a seasonal industry, contract labour is warranted, it added.

CII suggests that the maximum weekly working hours can be raised to 60 hours, including 12 hours of overtime, which becomes necessary during peak hours. The state should pass a Bill to allow women workers to work beyond 10 pm, as recommended by the Prime Minister. Karnataka also needs to set up textile training centres in satellite towns such as Hubli, Mangalore, Mysore, CII said.