| The ICMF has also stressed the need for avoiding excise exemptions for any segment and strengthen the Cenvat chain in order to ensure proper compliance of excise duty stipulations by all segments of the industry. |
| In a pre-Budget memorandum to the finance minister, the ICMF chairman, B K Krishnaraj Vanavarayar, has said that self-employed and small entrepreneurs in weaving, garment making and other areas already have adequate relief in excise duty. |
| The existing exemptions effectively cover even fairly large establishments since the turnover-based exemptions are available for any number of units functioning from the same premises. |
| Hand processors are also completely exempt from excise duty. These exemptions are already aiding evasion through underdeclarations and affecting the operation of duty paying units. |
| "Expanding the coverage of exemptions will only help large operators in the textile market to evade excise duty and render duty-paying units even more unviable," said Vanavarayar. |
| He requested that excise exemption for more than one unit operating from the same premises be withdrawn since it was prone to misuse. |
| To attract more investment in the sector, he recommended that all textile segments should have a uniform basic excise duty of 8 per cent. In the case of polyester yarn and textured yarn, he recommended an excise duty of 16 per cent for 2004-2005 against 24 per cent in the previous year. |
| He suggested that it may be reduced in stages to 8 per cent as recommended for other segments. The chairman also said that proper implementation of the debt restructuring package is of importance for the viable mills to remain healthy and potentially viable ones to revive. |
| ICMF has also suggested broad basing the concessional import duty of five per cent stipulated for some textile machinery. |
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