Cen­tral Bud­get Again Hits Branded Ready­made Gar­ments and Made-Ups: CMAI

Apparel - - MARKET WATCH -

Mr Rahul Me­hta, Pres­i­dent of the Cloth­ing Man­u­fac­tur­ers As­so­ci­a­tion of In­dia (CMAI), Mum­bai, has ex­pressed an­guish at the way the Cen­tral Bud­get pre­sented in Par­lia­ment has hit the ready­made gar­ments and made-ups seg­ment of the tex­tiles in­dus­try. In a state­ment is­sued, he re­called that in­tro­duc­tion of duty on fin­ished prod­ucts, while sus­tain­ing the ex­emp­tion for up­stream prod­ucts, was an ex­per­i­ment im­ple­mented a few years back by the pre­vi­ous Govern­ment and with­drawn sub­se­quently when the dis­as­trous con­se­quences were un­der­stood. Re­peat­ing that ex­per­i­ment is the last thing that the in­dus­try needed, es­pe­cially when the en­tire tex­tiles and cloth­ing in­dus­try in the coun­try is al­ready go­ing through a cri­sis be­cause of de­mand re­ces­sion, both in the do­mes­tic and ex­port mar­kets. Mr Me­hta pointed out that the very task of col­lect­ing this duty from the highly dis­persed and mostly tiny units in the gar­ment sec­tor would be a for­mi­da­ble one for the govern­ment, es­pe­cially when the rest of the value chain re­mains ex­empted, and there­fore, trace­abil­ity will be a se­ri­ous is­sue. The large num­ber of small and tiny units in the sec­tor will also find it im­pos­si­ble to fol­low the pro­ce­dures in­volved. The Mr Rahul Me­hta re­quested the Fi­nance Min­is­ter to with­draw this duty and con­tinue the op­tional duty regime that ap­plies cur­rently, un­til GST is in­tro­duced. He pointed out that once GST is in­tro­duced, the whole value chain will be cov­ered by duty and trace­abil­ity as well as com­pli­ance will im­prove tremen­dously and im­ple­men­ta­tion prob­lems will also ease con­sid­er­ably. It is also cru­cial to note that the cur­rent pe­riod was see­ing a lot of ex­porters, hop­ing to off­set their slow down in global mar­kets, mak­ing an en­try in the do­mes­tic sec­tor. Their ef­forts would again hit a road­block. Ac­cord­ing to Mr Me­hta, the im­po­si­tion is all the more sur­pris­ing when the Fi­nance Min­is­ter rightly em­pha­sised in his speech the im­por­tance of Job Cre­ation and the ‘Make in In­dia’ thrust. Tex­tile is the high­est em­ployer af­ter agri­cul­ture, and hence, it is in­deed iron­i­cal that new taxes are be­ing levied on such an In­dus­try. As it is, the In­dus­try is go­ing through a rough patch, with the on­slaught of on­line Com­pa­nies with their high dis­count­ing, and the some­what slug­gish sen­ti­ments of the mar­ket. This im­po­si­tion will worsen the sit­u­a­tion. re­sult will be that evaders will pros­per and com­pli­ant units will suf­fer. He added that the rev­enue for govern­ment from this de­ci­sion will be neg­li­gi­ble, whereas the prob­lems that it would cre­ate for the in­dus­try will be huge.

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