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The Textile Magazine
MARCH 2012
Mr. Sakthivel also said that since the service
tax has been increased to 12 per cent (from 10
per cent) and more services have been included in
the tax net, the Finance Ministry should increase
the service tax refund given to knitwear exporting
units from the existing 0.15 per cent to 1.5 per
cent of the total f.o.b. value of exports. This was
required to offset the increase in service tax rate.
The full exemption from basic duty is being ac-
corded to automatic silk reeling and processing
machinery as well as its parts.
Mr. Sakthivel has welcomed introduction of
GST from August and allocation of Rs. 1,000
crores under the National Skill Development Fund
in 2012-13. He has also hailed the setting up of
the Rs. 5,000-crore India Opportunities Venture
Fund with SIDBI for micro small and medium en-
terprises (MSMEs).
He has however expressed concern over the re-
duction made in the payment of excise duty on
branded garments, where the duty charged would
be at 30 per cent of the retail sale price against
the existing 45 per cent. The industry had in fact
sought full excise duty exemptions on branded
garments.
The Budget proposals evoked mixed response
from the textile industry in Coimbatore. Though it
has not dealt any harm to the industry, it failed to
consider the genuine demands with regard to man-
made fibres, said Mr. S. Dinakaran, Chairman of
the South India Mills Association (SIMA).
The industry was in fact demanding abolition
of five per cent customs duty and four per cent
special additional duty on par with cotton textile
for the man-made fibre textile. Criticising the in-
crease of service tax from 10 to 12 per cent and
bringing most of the services under the tax net, he
said it could have been avoided since GST would
become operational in August.
Mr. S.V. Arumugam, Chairman, Confederation
of Indian Textile Industry (CITI), observed that,
while CITI had requested for removal or reduction
of excise duty for man-made fibres, the duty has
gone up from 10 per cent to 12 per cent. Though
the hike is a part of increase in the standard rate it-
self, it would make man-made fibres of India less
competitive compared to the competing countries.
The Coimbatore District Small Industries As-
sociation President, Mr. M. Kandhasamy, has de-
scribed the Budget a total disappointment. How-
ever, he has welcomed the setting up of the Rs.
5,000-crore venture fund for the MSME sector
and the Rs. 1,000-crore National Skill Develop-
ment Fund.
w
Mr. S.V. Arumugam,
Chairman, CITI
Mr. S. Dinakaran,
Chairman, SIMA
budget 2012