Industry & Economy
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Budget
Budget may prune excise duty on man-made fibre
Our Bureau
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New Delhi
Feb 23
The textile sector is likely to see excise duty relaxation on man-made fibre products and Customs duty reduction for textile machinery imports.
The popular Technology Upgradation Fund Scheme (TUFS), which was to expire in March this year, is likely to be extended by another three years, though some fine-tuning in the interest subsidy scheme is expected in the Budget, sources said.
Currently, the textile value chain from yarn to garments attracts excise duty at the rate of eight per cent for man-made fibre products, against four per cent on cotton products.
The industry has the option of either paying excise duty at the stipulated rate and then claiming Cenvat on the inputs or not paying excise duty altogether.
It is likely that the excise duty rate on man-made fibre is likely to be brought on par with the duty structure on cotton and other natural fibres in the Budget, the sources said.
In light of machinery shortages being face by the textile industry, a reduction in Customs duty on machinery is likely to be part of an announcement in the Budget towards slashing duty on capital goods.
Customs duty on textile machinery currently ranges between five per cent and 12.5 per cent.
The textile and apparel industry, through the Confederation of India Textile Industry, had been calling for lowering of Customs duty to five per cent on all textile machinery, components and spare parts, besides removal of duty on machinery for processing and clothing industry.
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