Budget Expectations: AEPC has requested to provide tax subsidy to apparel manufacturers adopting environmental, social and corporate governance, international quality standards and compliance.
Apparel exporters' body AEPC has sought tax incentives such as uniformity in GST and increased interest subsidy to promote domestic manufacturing and outbound shipments from India. AEPC has requested to provide tax subsidy to apparel manufacturers adopting environmental, social and corporate governance, international quality standards and compliance. The council has also sought budgetary support for branding and marketing of products made in India. Let us tell you that on February 1, the Finance Minister will present the interim budget in the Lok Sabha.
The council said the interest rates under the Interest Equalization Scheme on pre- and post-shipment export credit for non-MSME (Micro, Small and Medium Enterprises) manufacturer exporters have been reduced from 3 to 2 per cent. High cost of capital has been a major hurdle for exporters. AEPC has requested the government to increase the rates under the scheme by 5 per cent for all apparel exporters. This, he said, will increase the competitiveness of the apparel industry.
With regard to Goods and Services Tax i.e. GST, it states that a flat tax of only 5 per cent should be imposed on the entire MMF (man-made fibre) value chain (fibre, yarn and textile). Currently the MMF GST rate on fiber is 18 percent, yarn is 12 percent and fabric is 5 percent, resulting in input credit and liquidity issues for MSME units.
To maintain their brand image in the global market, foreign buyers emphasize on maintaining consistency and quality and avoiding the use of counterfeit products. Any deficiency in specification and quality leads to rejection of the shipment.
