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Apparel exporters demand customs duty reduction

Also demand removal of excise on branded garments

Nayanima Basu  |  New Delhi 

Apparel exporters have demanded reduction of customs duty to 5% on synthetic fabric for the fiscal 2013-14. In its budget proposal to finance minister P. Chidambaram, the Apparel Exports Promotion Council (AEPC) has also requested waiving of the service tax and removal of excise duty on branded garments.

“Our thrust of the pre- budget proposal underlines: proposal for enhancing 100% garment exports in 3 years and 10% within the current financial year 2012-13 by reducing customs duty to flat 5% on synthetic and blended fabric in 2013-14 onwards. Another important proposal relates to the waiving of service tax on taxable service and expansion of services,” said A. Sakthivel, chairman, Apparel Exports Promotion Council (AEPC).

He also added that considering the employment factor and competition globally the government should remove excise duty on branded garments.

“In the last Budget, excise duty at the rate of 12% was imposed on readymade garments sold under a brand name in the domestic market and 30% of the retail sale price attracts 12% excise duty.  As per the recent agreement with Bangladesh, the garments imported from Bangladesh do not attract any customs duty and also their prices are lower than the Indian products due to various factors,” he highlighted.

The AEPC has also requested the government to provide exemption on services provided to the Government, local authority or government authority by council. In the proposal AEPC also said grant in aid to Export Promotion Council for overseas events and exhibition should not be treated as any service rendered to government and hence, should not be liable to service tax.

Sakthivel also said that in order to enhance export of garments and apparels from India the government should expedite the introduction of the proposed goods and services tax (GST) without any further delay.

In an effort to encourage more and more entrepreneurs to invest in synthetic garments manufacturing the government should permit the import of special machinery under zero% duty, AEPC said here today.

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First Published: Mon, January 14 2013. 13:43 IST