Textile cess on garments to be dropped
In a bid to boost garment industry, the government on Thursday decided to abolish the textile cess on ready-made garments.
By TNN |
NEW DELHI: In a bid to boost garment industry, the government on Thursday decided to abolish the textile cess on ready-made garments. It also gave nod to the Central Warehousing Corporation to form a subsidiary to develop rail side warehousing complexes and multi-modal logistics hub.
The decisions were taken by the Cabinet that met here under the chairmanship of Prime Minister Manmohan Singh. The removal of textile committee cess would provide relief to ready-made garment sector and help it improve competitiveness in global markets, information and broadcasting Minister Priyaranjan Dasmunsi told reporters after the Cabinet meeting.
The cess, which comes to 0.05% of the production value of textile industry, is levied on entire textile industry and textile machinery and is used to fund the activities of textile committee. The committee was set up by an Act of Parliament to ensure quality of textile and textile machinery.
During 2005-06, the cess contributed Rs 53 crore to the exchequer and this year the contribution is expected to be Rs 60 crore. The industry had been demanding the removal of the cess as it had outlived its utility and the collections were far in excess of what is required to sustain the committee’s activities.
Moreover, it has been suggested that the committee should charge fee for its services rather than levying a cess on textile industry. The committee is already generating its own revenue through consultancy fee and service charges.
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The Cabinet also permitted CWC to set up a subsidiary that in turn would form alliances with other players to develop warehousing complexes on land available near the railway tracks. “The subsidiary shall try to achieve much more by becoming a logistics player than what the CWC has been able to do,” Mr Dasmunsi said.He said the said subsidiary would be more focused and economical in its approach besides being having a broader vision for itself. Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) also approved Rs 565 crore project involving four/six laning of National Highway sub-project of Bangalore-Mulbagal stretch on NH4.
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