Industry & Economy
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Watches & Accessories
Plea to raise abatement rate on watches to 50%
Our Bureau
New Delhi
,
Nov. 15
The watch industry has demanded from the Government increase in the rate of abatement to 50 per cent, cut in excise duty and curbing of illegal imports. The All-India Federation of Horological Industries (AIFHI) argued that the present rate of abatement of 35 per cent is not justifiable.
"The manufacturing cost now is only 50 per cent of the maximum retail price (MRP) but we continue to pay excise duty on 65 per cent of the MRP," said Mr Harish Bhat, President, AIFHI.
Hike in excise duty
At a press conferenceon Tuesday, he said that there has been a steep increase in excise duties on watches from rates varying between eight per cent and 16 per cent in 1999-2000, to uniform 16 per cent now. The exemption provided for lower-end watches has also been withdrawn. The federation demanded that the excise duty be cut on watches costing more than Rs 500 and completely abolished on others.
The penetration level of watches in the country is about 25 watches per 1,000 people compared to the global average of 250 watches per 1,000 people. As per the recent national Readership Survey Platinum Study, 600 million people do not wear watches.
The total number of watches expected to be sold in the current year is four crore, while the industry is growing at 15-16 per cent annually, according to the federation.
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