New Delhi: Fulfilling the long-standing demand of the industry, the Government on Thursday decided to abolish Textile Committee cess on ready made garments.
"The exemption of ready made garments from Textile Committee Cess will rationalise cess and tax burden on ready made garments and improve their competitiveness in global markets," as quoted by PTI, Information and Broadcasting Minister Priyaranjan Dasmunsi said after a Cabinet meeting.
The Textile Committee was set up by an Act of Parliament to ensure quality of textile and textile machinery, and the cess, which comes to 0.05 per cent of the production value of textile industry, is used to fund the activities of the Committee.
The collections from the cess comes to Rs 42 crore in a year and readymade garments account for half of it, according to industry sources.
The industry, however, says that the cess has outlived its utility. They said the collections were far in excess of what is required to sustain its activities.
While welcoming abolition of the Textile Committee Cess from ready made garments, Confederation of Indian Textile Industry said it would have been better if the entire industry was exempted from it.
"We will have to start our campaign afresh to get the entire textile industry out of the purview of the cess," CITI General Secretary D K Nair said.
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