Knitwear, hosiery cos see red over duty hike

CHANDIGARH: The knitwear and hosiery industry has its knickers in a twist over the Union Budget’s proposal to levy excise tax on the industry and over the removal of the word ‘Optional’ from its ambit. This move has left the industry, the majority of which is in the small scale sector, virtually gasping for breath.
The budget proposes an 8% excise duty on knitted cloth and a 10% duty on garments. Ludhiana alone accounts for nearly 10,000 small scale units, the majority of which work for bigger units. Members representing various associations including the Knitwear Club, Ludhiana Knitters Association, Apparel Exporters Association of Ludhiana (Appeal), Kindgro, the Ludhiana Dyeing Association and the Federation of Knitwear, Textile and Allied Industries Association (Fektaa) met soon after the budget proposal on Friday to take stock of the situation. A small group also held a meeting in Ludhiana today to decide on the future course of action.
Fektaa member, Prem Sagar Jain indicated that at today’s meeting that it was decided that the Union government be urged “to maintain the status quo� and that the word ‘option’ be not removed from its ambit.
He told ET that as the majority of the units engaged in this sector were small and unorganised they did not have the requisite infrastructure and would now find themselves virtually in the doldrums. To maintain records at every stage would be a Herculean task not expected of small units.
While the Union Budget has given the textile industry a major fillip through rationalisation of the duty structure, the move to bring the knitwear and hosiery industry under the excise net has apparently been done under pressure from the large cotton mills, it is lamented.