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Government to exempt textile sector from service tax

The government will exempt the slowdown-hit textile sector from service tax as part of its short-term strategy to bail out the industry, Minister for Textiles Dayanidhi Maran said in New Delhi on Friday.

business Updated: Jun 12, 2009 18:02 IST

The government will exempt the slowdown-hit textile sector from service tax as part of its short-term strategy to bail out the industry, Minister for Textiles Dayanidhi Maran said in New Delhi on Friday.

"As part of our short-term strategy for the textile industry, we will try to rationalise fiscal structure, exempt service tax, reduce interest rates on pre- and post-shipment credit and facilitate faster clearance of arrears," Maran said in New Delhi while releasing a report on the effects of the slowdown on the textile sector.

He added that in the coming year the government would take steps to create one crore jobs in the sector and would build world-class state-of-the-art manufacturing facilities.

The report, "Impact of Economic Slowdown on Textiles Industry", was conducted by ICRA Management Consulting Services.

Over six lakh workers are estimated to have lost their jobs in the textile sector as exports crashed drastically due to the economic downturn worldwide.