The government's move to provide partial relief in excise duty on branded garments’ in the budget might help improve profitability, but there will not be any immediate price cuts, retailers and manufacturers said on Monday.
“The latest change in the Budget is a small one though, but it will provide a certain amount relief in terms of stability of product prices,” said Atul Chand, chief executive, ITC Lifestyle Retailing. There might also be some price reduction over a period of time but not immediately, he said.
Finance Minister Pranab Mukherjee has raised abatement on branded garments from 55% to 70% thereby bringing down the effective excise to 3.6% from 4.5% earlier. The overall excise duty rate has also been increased to 12 % from 10%.