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The Garment and Hosiery Manufacturers Association along with the textile industry has called for a nationwide indefinite strike from Thursday to protest against the ‘relief' in excise duty provided to protesting garment makers. Rallies and protests have also been planned while making representations to members of parliament.
Around 2-3 lakh manufacturing units across the country, especially in Delhi, Kolkata and Ahmedabad, are expected to be shut down, resulting in a loss of Rs 300-400 crore a day.
“All despatches for the month of March are closed and we have not taken excise numbers into account. We want the duty scrapped. We are also requesting retailers to participate in the strike,” said Mr Sanjay Jain, Vice-President, Federation of Hosiery Manufacturers Association of India. Rallies and protests are planned across the country. The industry also plans to make representations to MPs, highlighting the “problem of inflation” imposed, said a press statement.
The Finance Minister, Mr Pranab Mukherjee, had said on Tuesday that excise would be calculated on 40 per cent of MRP, down from 55 per cent as announced in the Budget. “It is common knowledge that manufacturers' selling price is about 35-45 per cent of MRP. Now the Government has proposed excise calculation on 40 per cent of MRP against 55 per cent. This is no relief as the duty continues to be 10.3 per cent on the selling price,” said Mr Sanjay Jain.
According to him, this has been done despite taking up the issue with the Finance Minister.
“The excise duty is a tax on the manufacturer and not the retailer. Hence, reference to MRP in context of exemptions is misleading and it is baffling why the Ministry has given this reference,” he added.
The industry has contested that MRP cannot be the basis for levying excise duty as the manufacturer, who fixes it, does not sell it directly to the consumer but passes it through the wholesaler and retailer. Hence, the selling price is not the MRP of a product but a wholesale price of just 35-45 per cent (of MRP).
“The manufacturer who does not earn MRP has to pay an excise duty based on the price. This is illogical. The Government has put an industry, which employs over 2.5 crore people, on the edge,” said Mr Jain.
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