Image Source : PIXABAY Apparel outlet
The Apparel Export Promotion Council (AEPC) has requested tax incentives, including uniformity in the Goods and Services Tax (GST) and increased interest subsidies, to bolster domestic manufacturing and India’s exports.
AEPC urged for tax concessions for apparel manufacturers adopting international quality standards and compliance with Environmental, Social, and Corporate Governance (ESG).
The council also sought budgetary support for the branding and marketing of Indian products. AEPC highlighted that interest equalisation rates were reduced from 3 to 2 per cent for non-Micro, Small, and Medium Enterprises (MSME) under the interest equalisation scheme.
“High cost of capital has been a major bottleneck for the exporting community. AEPC has requested the government increase the rates under the scheme to 5 per cent for all the apparel exporters,” it said.
The council proposed an increase to 5 per cent to enhance competitiveness and provide necessary working capital for the apparel industry. Additionally, AEPC recommended a uniform 5 per cent GST across the entire Man-Made Fibre (MMF) value chain, as the current differential rates result in unutilized input credit and liquidity issues for MSME units.
The council also suggested including trimmings and embellishments under the Import of Goods at Concessional Rates (IGCR) duty rules to facilitate the garment export trade. AEPC submitted a list of items currently not eligible for duty exemption and called for their inclusion in the list.
“Indian apparel exporters are constrained to use only those trimmings and embellishments that are pre-approved by the buyer, and these are mostly required to be sourced from overseas suppliers nominated by the garment buyers,” the council argued.
“AEPC has submitted a list of items currently not permitted, such as draw cord, elastic band/tape, metal tab/stopper/clip, velcro tape, leather badge, and D-ring, and has requested these items be included in the list for eligibility for duty exemption,” the AEPC said in a statement.
The council also proposed allowing a minimum waste of 10 per cent under the IGCR rules for the import of trimmings and accessories. AEPC Secretary General Mithileshwar Thakur expressed anticipation for the government’s response to these suggestions made after wider industry consultations.
(With PTI inputs)
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