Disappointing Budget for the garment industry’
Financial Express, India
Mumbai, Mar 3 The garment manufacturing industry is disappointed with the Union Budget 2014-09 presented by the Union finance minister, P Chidambaram last Friday.
The industry was expecting reduction of import duty and removal of countervailing duty on import of garment machinery, which would have helped in the upgradation and modernisation of the industry, according to the Clothing Manufacturers Association of India (CMAI). The industry has urged that the 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.
The industry has welcomed the announcements of the continuation of the technological upgradation fund scheme (TUFS) in the next five year plan and the increase of allocation from Rs 911 crore to Rs 1, 090 crore, the increase of the annual threshold limit from Rs 8 lakh to Rs 10 lakh in the service tax, reduction of Cenvat from 16% to14% and cutting central sales tax from 3% to 2%.
“The Union Budget 2014-09 has hardly any cheer for the garment industry. The finance minister has not addressed several important issues affecting the garment industry,†said Rahul Mehta, president, CMAI.
The garment industry was eagerly looking forward on several important issues such asrefund of state taxes and corporation levies and reduction of bank interest on pre-and post-shipment credit, which would have helped the exporters adversely affected by the sudden rupee appreciation , he said.
He stated that the appreciation of the rupee against dollar has lowered the earnings of Indian exporters, whereas those of Asian competitors have either appreciated less or even depreciated. As a result, prices of Indian garments have become non-competitive as compared to offers by our Asian counterparts.
