Reduction in DEPB may affect textile exports: SRTEPC

MUMBAI: The recent reduction in the DEPB (Duty Entitlement Pass Book) rates on man-made textile items is disappointing and might affect the exports severely, the Synthetic and Rayon Textiles Export Promotion Council said on Friday.

In a release, the council Chairman R L Toshniwal said the DEPB rates are fixed or revised taking into consideration the BCD (Basic Customs Duty) on the inputs covered under SION (Standard Input Output Norms).

Although the BCD was reduced in the Union Budget 2006-07, the imposition of 4 per cent SAD (Special Additional Duty) had increased the total customs duty on the raw material.

Further, the facility of availing Cenvat Credit of 4 per cent SAD granted to domestic manufacturers would not benefit the manmade textiles sector as excise duty on spun yarn, fabrics and made ups was optional and, therefore, most of the manufacturers in this sector had opted out of the Cenvat chain.

The steady increase in the prices of petroleum products had also made the raw materials for man-made textiles costlier, as a result of which the value addition being achieved in the case of exports of man made textiles came down significantly.