CMAI urges withdrawal of 2% excise duty on readymade garments

Dated 9th March, 2016

The Clothing Manufacturers Association of India (CMAI) on Wednesday urged the government to withdraw the Budget proposal to levy excise duty on branded readymade garments and continue with the optional duty regime.

Finance Minister Arun Jaitley had proposed 2% excise duty on branded readymade garments and made-up articles of textiles of retail sale price of Rs 1,000 and above.

"The Finance Minister should withdraw excise duty on branded readymade garments and continue with the optional duty regime that applies currently, until GST is introduced. Once GST is introduced, the whole value chain will be covered by duty and traceability as well as compliance will improve tremendously and implementation problems will also ease considerably," CMAI President Rahul Mehta said while addressing a seminar here.

Mehta further said that the "task of collecting excise duty from the highly dispersed and mostly tiny units in the garment sector would be a formidable one for the government". The introduction of the Rs 1,000 cut-off price point for the applicability of excise duty will further complicate the process, he said.