India : CMAI urges Govt to reduce import duty on garment machinery
February 11, 2014
Fibre2fashion.com, India
Mr. Rahul Mehta,President, The Clothing Manufacturers Association of India (CMAI), in a pre-budget memorandum sent to the Hon’ble Union Finance Minister, has urged that import duty on all machinery for use in the garment industry and accessories should be charged at a fixed 5% duty, without CVD or any other charges.
He further stated that the appreciation of the Rupee Vs. Dollar has further lowered the earnings of Indian Exporters, whereas those of our Asian Competitors have either appreciated less or even depreciated
As a result, prices of Indian garments have become uncompetitive as compared to offers by our Asian counterparts. The recent increase in duty drawback rates has helped to some extent but the major burden of state & corporation levies continue to hinder exports.
These collectively work out to approx. 6% of the FOB value. He urged that in the ensuing budget, Govt. should exempt export from all direct and indirect taxes (rather than pay and later refund).
CMAI also suggested that the introduction of VAT was expected to reduce prices but since fabric has not been included in VAT, garment units are not able to offset taxes & duties paid on inputs.
The Govt has placed imports of secondhand clothing (worn clothing) on the restricted list with 15% import duty calculated on the weight of the garment. Importers import fresh clothing in the garb of worn clothing since such clothing are discarded after being used once or twice.
Such clothing are not necessarily damaged or frayed at the edges. CMAI is of the view that India produces sufficient clothing to feed not only its own population but also to clothe the world. There is therefore no dearth of worn clothing in India. We urge a total ban on imports of secondhand clothing.
CMAI also urges the Govt to exclude garments from standard weights & measures act. CMAI also urges the Govt to remove excise duty on production of garment trimmings such as snap fasteners, rivets, tags, labels etc as imports of these items are exempted not only from basic custom duty but also from countervailing duty thus discouraging the development of the trim industry in India
The Clothing Manufacturers Association of India warmly welcomes the decision of Mumbai Municipal Corporation to remove octroi duty on fabrics & garments. With this removal, Mumbai
City will benefit greatly with smaller factories & businesses coming back within city limits and the unnecessary duplication of having operations both within & outside the city will stop.
This will generate additional employment and increase the trade in Mumbai. It will reduce the delay, paperwork & general hassles in getting various raw materials from out of the city limits.
Clothing Manufacturers Association of India
