Garment association 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 to seek government’s attention for the revival of the apparel industry and reconsidering the policy. The levy of excise duty coupled with duty-free Bangladeshi imports and economic slowdown in the West continues to hamper growth of the industry.

As Kundan Jain, President, South India Garment Association points out, “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 MRP as well as 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.”

It 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 absolutely wrong to consider that just by attaching a label, a garment becomes branded.

“With label garments fall 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 level playing field, the levy of excise duty must be on all readymade garments irrespective of a label,” adds Jain.