Garment association (SIGA) seeks removal of excise duty

Protesting against the negative impact of excise duty on readymade garments industry, South India Garment Association has sent a memorandum to R S Gujral, Revenue Secretary, and Textile as well as Medium & Small industry Ministry, to seek government’s attention for the revival of the apparel industry and reconsidering the policy. According to SIGA, the levy of excise duty coupled with duty-free Bangladeshi imports and economic slowdown in the West, continues to hamper growth of the industry.

Kundan Jain, President, South India Garment Association said, “Tariff value for RMG falling under the chapters 61, 62 and 63 has been fixed at 45 per cent of MRP. This is causing undue hardship to manufacturers since the wholesale price tends to change depending on the nature of garment trade. And in order to overcome this peculiar challenge, the association wants the government to remove excise on goods falling under the above mentioned chapters enabling the industry to pay excise duty only on the transaction value of the garments.”

Praveen Bafna, Vice President, SIGA, stated that duty free import of garment under new bilateral treaty with Bangladesh is a big blow to the domestic garment industry which is already facing negative growth.

The memorandum also points out that most traditional wear does not carry any label, also a section of manufacturers who are involved in making men’s casual and formal wear for the mass market do not put any brand name, so are out of the purview of excise duty. It is wrong to consider that just by attaching a label, a garment becomes branded.

“Label garments are falling under branded RMG and are liable for excise duty, while without label garments are under un-branded RMG and kept out of the purview of excise duty. This is causing unwanted unhealthy business practices since there is no specific definition of brand relating to garments”. In order to allow a leveled playing field, the definition of brand must be reconsidered", added Anurag Singhla, Secretary of South India Garment Association.

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