Apparel Export Promotion Council (AEPC) has described the Union Budget as a balanced, growth-oriented and forward-looking one as it will ensure an overall development of the garment industry by focusing on skilled labour, infrastructural improvement and manufacturing sector’s growth.
AEPC chairman, Ashok G Rajani said, “Addition of 1 per cent Free on Board (FOB) value of exports in specified duty-free fabrics will enable garment exporters to produce those garments which they were not competitive enough of producing till now.”
Additional exports worth Rs 7,500 crore is expected in the year 2016-17 due to incentives in the budget, he estimated.
In 2016-17, fabrics worth Rs 1,000 crore approximately will be eligible for imports, and custom duty worth Rs 110 crore will be saved on them. This will give avenues for new product development, which will give additional exports of Rs 2,500 crore, Rajani said in a statement.
Duty-free import of trimmings and embellishments of five per cent FOB will enable additional exports of Rs 5,000 crore. Explaining this, he said, the benefit of Notification No 41/2012 is now effective from 1-7-2012. Here the government has changed the post manufacturing drawback rate from 0.18 per cent to 0.21 per cent.
Its effect will be additional 0.03 per cent drawback on service tax of garment exports on FOB value. This is subject to the passing of Finance Bill, he added
