Basic HTML Version
8
|
The Textile Magazine
MARCH 2012
Budget proposals, a big boost
to weaving segment
budget 2012
The duty reduction on equipment for
modernising mills and lower incidence on
branded garments as announced in the
Central Budget for 2012-13 presented
by the Finance Minister, Mr. Pranab
Mukherjee, has left the textile sector
happy. The duty concessions offered for
mills opting to modernise and a financial
package of Rs. 3,884 crores for waiver
of loans for handloom weavers and their
cooperative societies are really welcome
features of the Budget.
Textile mills planning modernisation will benefit
from customs duty exemption (five per cent earlier) on
automatic shuttleless looms. Weavers will benefit from
this in a big way, as production in India of advanced
shuttle-less looms is very low and, thus, they are forced
to import. The import duty on second-hand automatic
looms will also come down to 9.33 per cent from the
present 14.33 per cent.
“Duty-free imports will definitely make import of
advanced shuttle-less looms cheaper,” said Mr. Rahul
Mehta, President, Clothing Manufacturers Association
of India.
Branded garment makers also have a reason to cel-
ebrate. While the excise duty on branded garments
has been increased from 10 per cent to 12 per cent, the
abatement of 55 per cent from the maximum retail price
(MRP) has also been raised to 70 per cent. This would
bring down the incidence of duty as a percentage of
MRP from 4.5 per cent to 3.6 per cent.
“The Budget is pragmatic, growth-oriented and is in
the right direction’’, said Mr. Amit Ruparelia, Chair-
man, Cotton Textiles Export Promotion Council (TEX-
PROCIL). “The exemption of customs duty on auto-
matic shuttleless looms will certainly give a boost to
the modernization efforts of the textile industry in the
weaving sector and will help India emerge as a vibrant
hub for fabric production in South Asia”.
Said Mr. Sanjay Lalbhai, Arvind Chairman and Man-
aging Director: “Reduction in basic customs duty on new
automatic shuttleless looms and increase in the abate-
ment rate for branded garments will have positive im-
pact on the textile industry. However, the industry will
have higher input tax burden on account of increase in
excise duty and service tax by two per cent. The sector,
which is currently under an optional excise duty regime,
will suffer the incidence of the incremental increase of
excise duty and service tax on goods for domestic sale.
However, the same would be neutral for exports.”
Powerloom mega cluster
The Government also plans to set up a powerloom
mega cluster in Ichalkaranji, Maharashtra, with a
budget allocation of Rs. 70 crores. Ichalkaranji is
Mr. Sanjay Lalbhai,
CMD, Arvind Ltd.