West Bengal Garment Manufacturers and Dealers Association has expressed concern over the imposition of two per cent excise duty on readymade garment of Rs. 1000 or more as proposed in the Union Budget for 2016-17 and urged the centre to exempt it from the preview of such levy.
Addressing a workshop organized by the Association in Kolkata recently, its president Hari Kishan Rathi said it is observed that though the readymade garment units largely belong to small scale sector, the governments, times and again, have been targeting the sector which has been serving the needs of teeming millions of India. He said besides causing serious difficulties to the entrepreneurs, demand for branded garments will take a hit following levy of such excise duty as “we will have no other way but to pass on the burden to the customers.” The garment industry, he said, has already been facing glut situation due to global slowdown. Now with the levy of excise duty, the domestic demand is surely be impacted.
Rathi also said, over the years, the garment manufacturer have experienced steep hike in cost of raw material and accessories required for manufacturing the garments. Besides, cost of labour, capital, electricity have gone up tremendously. All round increase in input costs has led to high cost of production of garments. Moreover, the units will be under constant apprehension of consequences of making unintentional mistakes in complying of the formalities, inspection and raids by the excise department.
In consequence, many of the small garment manufacturing units come under the excise net which entails a lot of formalities. If the units come under the purview of excise duty, proprietor or partners himself have to take burden of excise hassles. From practical point of view, this is too much for them, he said.
In these circumstances, Association president urged the centre to exempt readymade garment from the purview of the central excise or increase the threshold limit from MRP of Rs. 1000 to minimum of Rs. 2000.
