Textile panel may propose tax rejig

NEW DELHI: The task force set up by Prime Minister to map a policy and fiscal restructuring plan for the textile industry is likely to recommend overhaul of excise and Customs duty structures for textile machinery and changes in the Export Promotion Capital Goods scheme (EPCG). The task force wants knitwear and powerlooms sectors to be brought under normal cenvat rate of 16%.
The partial tariff revamp effected in Budget had put woven and knitted grey fabrics under voluntary duty of 12%. Processed cotton knitted fabric and knitted garments had too been brought under the 12% optional duty.
During its first meeting here yesterday, the task force headed by textiles secretary S B Mohapatra decided to work out a formula to make cenvat assessment simpler for the decentralised sectors.
Sources said the task force would also come out with a time-bound project to reduce the incidence of sickness in industry.
The aim is to spur investments in the desired areas and make India a hub of production of good quality textiles and prepare domestic industry for the phase-out of the multi-fibre agreement slated for 2004.
A special scheme for encouraging investments in apparel parks would also be drawn up.
The task force will submit report to Prime Minister by September 30.
he N K Singh committee had earlier cited the skewed tariff structure in the textile industry as the main reason for the stagnation in the industry.
In line with Singh panel’s suggestions, Budget had unveiled a special package for the textile industry. The corrections had however been considered incomplete and the prime minister later appointed the task force to complete the exercise.
The task force comprises finance and commerce and industry ministry officials and representatives from CII textile committee and NCAER.