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Pranab goes soft on garment levy

HT Correspondent, Hindustan Times  New Delhi, March 23, 2011
First Published: 00:06 IST(23/3/2011) | Last Updated: 00:08 IST(23/3/2011)

Referring to the concern expressed by small-scale garment manufacturers on the 10% excise levy on branded ready-made textiles garments, finance minister Pranab Mukherjee proposed to enhance the abatement from 40% to 55% of the retail sale price.


With this, a unit will continue to be eligible for SSI exemption in 2011-12 even if it had a turnover based on retail sale price of Rs8.9 crore in the current year, he said.

He was replying to the debate on the finance bill during which the MPs, particularly from poll-bound West Bengal pointed at the garment traders’ grievance, who had criticised the proposed 10% excise duty on ready-made garments.

“I would also like to reiterate that the levy  does not apply on unbranded goods... it does not apply to made-for-order retail customer,” Mukherjee said, adding the proposal was aimed at preparing the ground for GST.

Several members on Tuesday demanded rollback of the reduction of import duty on silk even as they welcomed the government’s decision to take back service tax imposed on high-end health facilities.

Initiating the debate on the finance bill, KS Rao (Cong) said the government should not be too concerned about rising inflation and the Opposition’s protests, maintaining the poor were not affected by it due to effective PDS. He suggested the government could allow inflation to rise above 20%. “Our leaders should have the courage to say we have increased the price. The poor are not affected by it.”

PC Chacko, who was presiding, reminded Rao he had to address the Chair as he frequently kept addressing UPA chairperson Sonia Gandhi during his speech.

JD-S chief HD Devegowda said because of reduction of import duty was driving silk industry workers to suicide. He feared that drastic decline in raw silk production might lead to China dumping its products in India and controlling the international silk markets.

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