TEXTILE MINISTRY WELCOMES CONCESSIONS
ANNOUNCED BY FINANCE MINISTER
SHRI
RANA APPEALS TO TEXTILE INDUSTRY TO RESUME PRODUCTION
The Minister of
Textiles, Shri Kashiram Rana, has appealed to the entire textile
industry to resume production. He said that the Textile Ministry
would try to impress upon the Finance Ministry to maintain stability
in the duty structure without resorting to frequent changes to
ensure stability of the fiscal regime.
Shri Rana said that
Budget proposals 2003-04 announced by the Finance Minister which
were basically aimed towards upgradation and modernisation of
the textile industry and to equip it to face post – MFA (Multi
Fibre Arrangement) global competition. However, the Budget proposals
caused some practical difficulties especially to small self-employed
units in the textile sector. Appreciating their genuine problems
and Government’s commitment to totally protect the interests of
the small and self-employed weavers and garments manufacturers,
Finance Minister has announced certain concessions on April 30,
.2003. Shri Rana has said that the Textiles Ministry welcomes
the concessions which would provide much required relief to the
targeted small and self-employed entrepreneurs. The concessions
are:
- The production of grey fabrics
meant for home consumption up to the value not exceeding Rs.20
lakh has been exempted from excise duty. The production of such
fabrics for home consumption by the manufacturer from one or
more factories or from a factory by one or more manufacturers
does not exceed Rs.25 lakh is also exempt from excise duty.
- The production of readymade garments
and clothing accessories not bearing a brand name or trade name,
whether registered or not, up to an aggregate value of Rs.25
lakh has been exempted from excise duty. The production of such
garments for home consumption by the manufacturer from one or
more factories or from a factory by one or more manufacturers
does not exceed Rs.30 lakh is also exempt from excise duty.
- In case the manufacturer does
not want to opt for exemption and pay duty, he would be entitled
for claiming CENVAT credit on actual document basis.
- Excise duty on pure cotton fabrics
has been reduced from 8% to 5% for the hand-processing sector
provided that process of bleaching, dyeing or printing or anyone
or more of these processes is carried out without the aid of
power or steam. After taking CENVAT credit, the duty to be paid
by such processors would be very meagre.
- Excise duty on man-made / blended
/ woollen fabrics has been reduced from 10% to 8% for the hand
processing sector provided that process of bleaching, dyeing
or printing or anyone or more of these processes is carried
out without the aid of power or steam.
- The production of fabrics made
from monofilament yarn, rubberized textile fabrics, woven and
unprocessed cotton belting, round mesh mosquito net fabrics,
up to an aggregate value of Rs.25 lakh has been exempted from
excise duty.
- SSI excise exemption is already
available for units engaged in the production of narrow woven
fabrics, gauze, labels, badges, etc.
- The activities related to putting
labels or re-labelling, i.e., attaching or affixing price tag,
name of the seller, re-packing from bulk packs to retail packs,
alteration or any other process to make the product marketable
has been exempted from excise duty.
- Further processing of excise exempted
items i.e. grey fabrics and garments would be eligible to claim
CENVAT credit of the duty paid on the inputs of such items provided
actual duty paid documents have necessary endorsement in favour
of the party engaged in further processing.
- Excise duty has been reduced on
interlining fabrics from 16 per cent to 10 per cent to put this
fabric at par with other fabrics of man-made / blended sector.
- Customs duty on a large number
of textile machinery (117 items covering man-made fibres / yarns,
technical textiles, wool and weaving sectors) has been reduced
from 25 per cent to 5 per cent.
- Customs duty has also been reduced
on raw wool (mohair, fine animal hair and cashmere) and flax
fibre from 15 per cent to 5 per cent.
- Relief has also been provided
to the small units engaged in shoddy industry by reducing customs
duty on rags from 25 per cent to 5 per cent.
Finance Minister
has also announced that he has given strict instructions to the
field organisations that there would be no visit by Inspectors
to the powerloom / garment units. There would no inspection. The
scheme of self-assessment has been introduced for the powerloom
units to declare their production. He has also given assurance
that if any complaint is received against field staff, he would
take care of the situation.
It is expected that
the above concessions would provide considerable relief to the
small units located all over India. It is also expected that the
industry would welcome the duty concessions announced yesterday
and would start normal production all over the country.
Consequent to the
announcement of the reliefs provided, the production has been
resumed in Coimbatore, Erode, Salem, Karur, Bhiwandi, Malegaon,
entire Karnataka, Rajasthan and Gujarat. I appeal to those who
have not yet resumed their operation to resume production as the
reliefs announced have taken care of the apprehensions of the
industry.
