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Representative from South India Garment Association approached to Finance Minister Mr. Arun Jaitley through Mr. Anantkumar, and personally meet with Union Home Minister Mr. Rajnath Singh, Textile Minister Mr. Santosh Kumar Gangwar, Minister for Commerce, Ind. & Revenue Ms. Nirmala Seetharaman and submitted a copy of memorandum for Levy of Excise Duty on Garments not to be considered.

Mr Anurag Singhla, Secretary of SIGA has explained the impact of excise duty on garment with various aspects.

Levy of Excise Duty on Garments not to be considered

Reference to news appeard in print media that excise duty on branded garments may return. In 2004 excise duty was removed being its deep negative impact on garment trade & industry. Excise duty was imposed by that time finance minister Sri Jaswant Singh in 2002, which damaged the industry deeply evaluating the situation Sri Chidambram removed the excise duty from the branded garment in 2004.

Within two years of excise regime garment industry suffered deep impact & many small & medium garment manufacturers closed leading to huge un-employment specially women. Again in 2011 Sri Pranab Mukharjee re-imposed but removed again within two years 2013. Due to negative impact which forced government to roll back the excise duty from garments ‘twice’.

Definition of Branded Garments: Still, definition of branded garments is not yet underlined by the government. There is no specific definition of what constitute a brand for garment ‘mere’ attaching a label does not make garment a branded garment.

A men shirt of MRP 250 with label falls under excise net while a ladies salwar suit or other outfit of Rs 2000/- not attached to a  label or without brand name does not fall under the  purview of excise duty net because that garment is not carrying a label. Such Branded garment definition leads to steep unhealthy business practices.

Non-polluting, low power consuming but high Job creating: It is known that garment industry in non-polluting industry which consumes minimum power while creates maximum jobs especially to women.

Government is aware that garment manufacturing is one of the most labour intensive sectors and there is huge opportunity for employment under this sector.

Fashion Cycle base: Fashion driven industry has various complexities attached to this industry. Multiple movements during manufacturing, High risk of rejection, huge cost of sampling, discounts which makes industry a very difficult.

Competition from neighbouring countries: Our neighbouring countries specially Bangladesh have encouraged garment industry and to a extent is ahead of us may quote that a threat to our industry while under bilateral trade treaty with Bangladesh may result shifting manufacturing activities to neighbouring countries like Nepal, Sri Lanka, Thailand and Bangladesh resulting considerable reduction in garment manufacturing sector reducing jobs in domestic industry.

Govt’s Schemes & Incentives: Various schemes, incentives and subsidies given to garment sector for development the manufacturing and create jobs but bringing garment sector under excise duty may downsize the garment industry and creating unemployment. 

Transit to GST: While we are heading towards GST regime, re-introduction of excise duty on garments may lead to huge confusion and great fall will down size garment manufacturing sector impacting employment.


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