Cloth makers demand duty cut

The Surat Art Silk Cloth Manufacturers' Association (SASCMA) has demanded reduction of excise duty on man-made fabrics from the present 10 per cent to eight per cent.

The association also demanded that the excise duty on technical textiles be brought down from 16 per cent to ten per cent. Powerloom units should get excise duty exemption on the lines of the small-scale industries, the association said.

In a pre-budget memorandum submitted to the Union finance minister Jashwant Singh, the association, which is the apex body representing all the segments of the Surat textile industry, said in the last budget, the central government had obtained sanction from the parliament to empower the states to levy sales tax on fabrics.

"In the interest of the textile industry, the central government should now empower the state governments to levy sales tax on fabrics, without waiting for the official introduction of state VAT," the association president Arunbhai Zariwala said.

A number of states have provisions in their respective sales tax Acts to compensate sales tax paid on inputs on declared items. States desiring to develop textile industry can include fabrics in the list of declared items, the memorandum has suggested.

The cost of fabrics will be reduced to the extent the sales tax paid on yarns is rebated and the industry will become more competitive in the international markets.

As per the world market forecast for 2010, the consumption of technical textiles will grow to nearly 24 million tonnes per annum, with a value of nearly $93 billion.

The association said as per the existing provisions, powerloom weavers with an annual turnover of Rs 35 lakh will have excise duty exemption for the first clearance of Rs 25 lakh (earlier limit was Rs 20 lakh) during the year.

In the case of small-scale industries, excise exemption is provided to the units up to a turnover of Rs one crore.