The Finance Ministry may provide some relief to exporters in Budget 2023–24 by allowing import duty exemptions on a larger number of trimmings, embellishment items, and input materials, mainly used by the apparel and textiles, handicraft, and leather industries.

“Exemption from import duties on a whole range of inputs, embellishments, and trimmings such as velcro tape, sewing thread, wadding materials, and textile flowers would ease cash flow for exporters and is being considered by the Finance Ministry,” an official tracking the matter told businessline.

Import duty relief

In last year’s budget, Finance Minister Nirmala Sitharaman announced import duty exemptions for some embellishments and input materials, but those were very few in number. “The FM provided import duty relief for just 8–9 items in last year’s Budget. That is not enough. Foreign buyers insist on a variety of specific inputs and embellishments to be used in the exported item that have to be necessarily imported. Exporters want relief on all such items,” the official said.

The list of embellishments and trimming items for import duty exemption submitted by exporters to the government also includes shoulder pads, sliders / pullers, various tapes, elastic cloth & band, beads for embroidery, bobbin elastic, water-soluble lining, stamping foils, insoles, glove liner, shanks, toe caps, adhesive, ribs, heals, leather board, shoe laces, and fashion taps; electric parts for fitting on electric lamps; and CFL and bulb.

“The items under consideration attract import duties ranging between 5 and 12.5 per cent. Although the import duties get reimbursed as an Input Tax Credit under GST, but there is a time lag, and exporters’ cash gets stuck. Exempting them would ease cash flow,” the official said.

As the demand would not result in an additional burden for the exchequer, the commerce department is hopeful that it would not be difficult for the finance Ministry to fulfill.

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