Namrata Kath Hazarika | 16 Feb, 2012
Faced with high volatility in commodity prices, high interest rates, and slack in demand in the key export markets during the last one year, the textile and clothing industry has urged the government to incorporate measures that can provide some relaxation to the sector in the forthcoming Union Budget 2012-13.

The Confederation of Indian Textile Industry (CITI) in their recent representation to the government has stated, "The Central Budget for 2012-13 needs to take into consideration the serious problems being faced by the industry and incorporate measures to assist the industry to get back into the path of growth."

CITI requested that the mandatory excise duty of 10 per cent on branded garments and made-ups, which was introduced during the Union Budget 2011-12 should be withdrawn and the optional route be continued for all the segments in the textile and clothing sector.

The chamber also added that man-made fibres currently suffer substantially higher duties than other fibres such as cotton. The 5 per cent customs duty and 4 per cent Special Additional Duty (SAD) applicable on man-made fibres, which are not applicable to other fibres should be abolished.

Similarly, 10 per cent mandatory excise duty which is applicable to man-made fibres and not applicable to other fibres should also be abolished, CITI stated.

In fact, the optional excise duty applicable to cotton textiles products at present is at 4 per cent, whereas in the case of man-made fibre products it is 10 per cent. It is requested that optional excise duty for all textile products be harmonized at 4 per cent, it added.

Also, the fabrics sector need both consolidation and modernisation. For that purpose, it is necessary to increase the role of modern weaving machines. "We would therefore request that all automatic and shuttleless looms may be extended the facility of optional excise duty, instead of the mandatory excise duty currently applicable," CITI said.

Further, CITI wants that the Technology Upgradation Fund Scheme (TUFS) may be continued during the entire 12th Five Year Plan as it has been extremely useful for expansion and modernisation of the textile and clothing sector. Also, sufficient funds may be allocated for the scheme.

Moreover, the TUFS beneficiaries should be treated at par with others in the matter of zero duty EPCG scheme since TUFS has nothing to do with EPCG scheme. The government has excluded the units availing TUFS benefits from the zero duty facility under EPCG scheme.

On export credit, CITI urged the government that the export credit may be made available for all textile products at 7 per cent interest.

And levies at the level of state and local bodies amounting to 6 percent which is currently not being refunded to exporters through any scheme may be refunded through duty drawback scheme or any other scheme, the chamber added.