Chairman AEPC, Dr. A Sakthive, in the proposal presented, to Shri Anand Sharma, the Union Minister for Commerce, Industry & Textiles, has made submission for increasing the garment exports to US $16 billion in 2013-14.
The meeting was just before the finalization of annual supplement to FTP to be announced shortly. Dr. Sakthivel has proposed set of measures to boost the garment exports from the country; which includes detailed road map and changes in policy for duty credit scrip, issues related to overtime, changes in FTP for more making it more inclusive and flexible for garment exporters and manufacturers, recommendations on TUFs, custom duty and service tax. In his proposal Chairman AEPC has asked to allow duty credit scrip @ 5% of garment exports for the export performance in the year 2012 -13, for issuance of duty credit scrip from the year 2013 -14 and onwards.
Chairman thanked Shri Anand Sharma for removing excise duty on Fabric/Readymade garments. Recent increase in the prices of yarn has affected the industry input cost therefore, Chairman AEPC as a measure to protect the value added manufacturers, the cotton yarn should also be permitted to be inported duty free, as in the case of cotton being allowed for yarn manufacturing.
Chairman proposed for encouraging garment exporters to accelerate in venturing manufacturing of garment of fabrics, both for knitwear & woven, which are not widely available in India and issuance of Duty Credit Scrip at the rate of 5% to garment exporters for the exports made from the year 2012-13 onwards in the 12th Five Year Plan Period on Actual User Basis. The Scrip will be used for offsetting custom duties on the specialty fabrics of textile.The issue of scrip shall be subject to actual user and non-transferable.
Further, Items of import falling in Chapter 50,51,52,53,54,55,56,58,59 & 60. The inputs sourced under scrip and used or export product would not lead or caused to deduction in permissible Duty Drawback (DBK) claimed as per all Industry DBK Schedule. The item of exports would fall under Chapter 61& 62. With the implementation of this scheme, more domestic fabric manufacturers both for knitwear & woven will come forward and shall start production, he added.
Apparel exports from India are seasonal and primarily cotton based. Workers need to supplement their income to fight inflation and to get decent wage at higher levels. Chairman AEPC has demanded extra wages for overtime under section 59 of Factories Act 1948 is more than what is prescribed under ILO convention – it should not be more than 125%.
The cap of 50 hours a quarter should be removed under section 64 of the Factories Act, 1948. In addition Chairman recommended modifications in Section 59- Where a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of his one-and-one quarter times of the regular rate.
It is requested that Govt. may notify ATDC and AEPC respectively as VEC and Skill Assessment Body, recognized by the law, since they are operating out of grants provided under Modular Employable Skill Course and funds are released by the Ministry of Textiles under budgetary heads mentioned above.
Few additional demands are: to convene –TEXSUMMIT – inviting CEOs of major international apparel brands for inviting FDI and boosting manufacturing of garments. Chairman requested that Hon’ble Commerce, Industry & Textile Minister may Preside-over the Summit.
MAI Funding of two Tex-Trends India in a financial year and up-scaling the funding from Rs. 5 crores to Rs. 9 crores each fair under Made-in-India show/Tex-Trends India. And, to add MDA/MAI support for exporters starting e-commerce project. Along with 300 centers for ATDC in XII plan and AEPC’s Innovative Research/Resource Centers under the Integrated Skill
On account of the proposal for Foreign Trade Policy Dr. Sakthivel has recommended that the scheme announced in FTP may be extended by 3 years up to the year 2015-16, so that exporters can plan their marketing strategies on long term basis.
Non-traditional markets needs to be tapped & to reduce the dependence on EU/USA, in this regard Chairman AEPC has proposed increase of duty scrip from 3% -4% to 5% for the non- traditional markets. In traditional countries like EU and US, duty scrip may be increased from 2% to 3%. Under Status Holder Incentive Scheme, the duty scrip may be increased from 1% to 2%. Expansion of Market Linked Focus Product Scheme to certain countries like Singapore, Turkey, Taiwan, Norway, Canada, Hong Kong, Russia, Switzerland, Korea, UAE, and Malaysia. Incremental growth achieved in Apr-Dec 2012 over Apr-Dec 2011 is qualified for incremental scrip. Thereafter the same benefit may be given for entire year till 2015-16 for the incremental growth achieved in previous year.
Early finalization of FTA with EU, to announce all the benefits in Foreign Trade Policy for the year 2013 -14 and 2014 -15 and 2015-16 (for three years), duty Scrip @ 5% on FOB value of exports to countries like Latin America, Australia and New Zealand, where freight charges to FOB are very high, Zero duty EPCG Scheme to be extended for the year 2013 - 14 to 2015 -16 are the other proposed measures submitted by AEPC.
A Strong infrastructure if the backbone of manufacturing and exports thereby. Chairman AEPC has with regard to TUFS Issues has asked for 8% interest subsidy for processing of Effluent (Effluent Treatment plants), 25% capital subsidy for process house, 50% capital subsidy for Effluent Treatment plants and old pending cases of TUFS to be taken up.
With respect to custom duty restricting export of cotton yarn or allowing duty free import of cotton yarn as done in the case of cotton imports duty free. Recent increase in prices of cotton has reduced our competitiveness because per unit cost of manufacturing goes up. Consignment should not be stopped at port thereby ensuring the timely and quality delivery as apparel products are perishable commodity, issue of alert by custom authorities throughout India, on the pretext of old cases of Drawback, Classification problem at customs, Textile Committee to be given the power of binding classification.
On account of the service tax waiving of Service Tax on taxable service to in sub clause (zzze) of clause (105) of Section 65 of Finance Act on services to specified associations under (zzze) of Finance Act) for the period viz. 16.06.2005 to 06.07.2009. Expansion of services under Notification No. 25/2012-Service Tax dated 20th June, 2012 and exemption of taxable services from the whole of the service tax leviable thereon under section 66B of the said Act.
The Govt. should notify that service tax on taxable services mentioned in sub clause (zzze) of clause (105) of Section 65, should be exempted for the period from 16.06.2005 to 06.07.2009 owing to inadvertent anomaly.
