Chairman of The Southern India Mills’ Association (SIMA), T Rajkumar welcomed the decision of the Duty Drawback Committee and the Government for announcing enhanced rates and value caps for textiles and clothing products.
The Duty Drawback Committee recommended the enhanced rates which become applicable from November 22, 2014, on a majority of textile and apparel products, after taking feedback from various textile export promotion councils and after also taking into account the levies suffered.
T Rajkumar thanked the Committee for favourable considering the recommendations made by SIMA in respect of cotton yarn, spandex coarse spun yarn and fabrics and welcomed fixing separate rate for counts 50s and above.
Earlier cotton yarn was eligible only for a single rate at 3 per cent with a value cap of Rs 13 per kg while in the revised rate, the same has been retained for counts below 50s and for counts 50s and above, the rate has been revised to 2.8 per cent with an enhanced value cap of Rs 18 per kg.
T Rajkumar is of the opinion that though certain counts like 50s and 60s might be affected with the revised rates, while superfine counts 80s and above would be benefited. Likewise, a separate rate for spandex coarse spun yarn at 4.7 per cent with a value cap of Rs 16 per kg would help exporters to have a competitive edge.
“There has been a steady growth in the export of spandex coarse spun yarn and the revised rate would help in increasing such exports,” he said.
The drawback rate for grey cotton fabric has been reduced from 4.4 per cent to 4.3 per cent, however value cap has been hiked from Rs 24.50 to Rs 37.00 per kg, while in dyed fabrics, rate has been increased from 4.9 per cent to 5.0 per cent and value cap has also been raised from Rs 31.50 to Rs.50.00 per kg.
SIMA Chairman has stated that though the same rate has been retained for grey knitted fabrics, the rate has been revised for dyed knitted fabrics from 4.9 per cent to 5.1 per cent with a marginal increase in value cap of Rs 31.50 to Rs 33.00 per kg.
T Rajkumar appealed to treat made-ups on par with garments and consider giving enhanced rates, considering that there is a marginal reduction in drawback rates of made-ups by 0.1 per cent and Rs 4.00 per kg.
The drawback rate for cotton ready-made garments has been marginally reduced from 7.6 per cent to 7.5 per cent while substantially increasing the value cap from Rs 56.70 to Rs 75.00 per kg and in blended garments, the rate and value cap has been expanded from 8.9 per cent to 9.5 per cent and Rs 58.10 to Rs 90.00 per kg, respectively.
The drawback rates for man-made garments too have been marginally reduced from 10.2 per cent to 9.8 per cent, but value cap has been amplified from Rs 59.50 to Rs 93.00 per kg.
The SIMA Chairman added that the enhanced value cap would encourage value addition which is the need of the hour to boost exports, capture the international markets and bridge the gap in the balance of payments. (AR)
