Financial Daily from THE HINDU group of publications
Friday, Feb 18, 2005
Financial Daily from THE HINDU group of publications Friday, Feb 18, 2005 |
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Industry & Economy
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Textiles Ad valorem drawback rate for textile exporters mooted Our Bureau
Coimbatore , Feb. 17 THE Ministry of Textiles has recommended to the Finance Ministry the re-introduction of the ad valorem-based duty drawback system for textile exporters. The Secretary, Ministry of Textiles, Mr R. Poornalingam, told reporters here on Wednesday that his Ministry had written to the Finance Minister to retain the ad valorem duty drawback system, as textile exporters had expressed their difficulties due to the weight-based duty drawback rate. According to him, their common grouse is, that this rate structure had cut into the export incentives. It was disproportionate to the cost of inputs on export manufacture and it acted against value-added manufacture. The Textiles Secretary had been interacting with members of the industry, including the Tirupur-based garment units during his two-day visit here. He got repeated requests during the meetings that the ad valorem based drawback rate that prevailed before January19 be continued. Members of the Southern India Mills Association (SIMA) on Wednesday pleaded that since textiles would be among the few commodities outside the new VAT regime, the State levies would remain non-VATable and hence need to be adequately compensated by the Centre. Some of the SIMA members also suggested that the higher capital subsidy being considered by the Centre for the modern textile processing units be given retrospective effect and extended to units that were recently set up. However, the Textiles Secretary felt that since the higher capital subsidy model planned for the processing sector is framed under the upfront capital subsidy dispersal and the Government has enunciated it as a policy, it may not be possible to have it in the retrospective mode now. But he said that those who had already invested in the project by enjoying the existing 5 per cent interest reimbursement route of the Technology Upgradation Fund Scheme scheme have the early bird advantage of reaping good business from new plants commissioned at a time when the textile market is on the ascendancy.
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