Home > Editorial > Full Story

CII seeks reduction in excise duty on textiles to 8%

E-Tex Staff - New Delhi

The Confederation of Indian Industry has demanded an excise duty reduction on textiles excluding handloom products to eight per cent from the current 12 per cent. This duty may be applied throughout the industry in an unbroken cenvat chain excluding handlooms, a CII release said.

"If the government does this, it will actually get more money," Mr S P Oswal, chairman of CII’s National Committee on Textiles, said.

Stating that government’s move to reduce the excise duty rate from 16 per cent to 12 per cent in the last budget had lead to higher tax collection, he said "next year, collection will rise still further, as many players who did not pay any taxes at all, will now find it worthwhile to pay,"

The budget provision allowed the textile industry to pay a special 12 per cent rate for couple of years while all industries pay cenvat at 16 per cent rate.

However, the committee sought further reduction in order to ensure better tax compliance by all segments.

It also favours completion of the de-reservation of the knitting sector.

CII is of the opinion that the duty reduction would give the textile industry a space to grow by becoming strong in the domestic market before 2005 when quotas will be abolished.