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AEPC is pleased with the Union budget

India’s apparel sector is pleased with the overall Budget announcements and schemes being initiated for the upcoming financial year. Apparel sector’s long requisition was also addressed in this year’s budget, with a reduction on basic customs duty made from a total of 5 per cent to 2.5 per cent.

Adding on to the exports-related announcements made in the Budget 2016-17, Ashok G Rajani, Chairman, Apparel Export Promotion Council (AEPC) said, that a total additional exports of Rs 7,500 crores in 2016-17 are envisaged with the incentives announced in this Budget. In the year 2016-17, fabrics worth around Rs 1,000 crores would be eligible for imports and custom duty of Rs 110 crores would be saved by garment exporters.

However, the AEPC felt that the increase in service tax from 14.5 to 15 per cent will adversely affect the growth of apparel sector. Moreover, 2 per cent excise duty on branded readymade garments and textiles with sale price of more than Rs. 1,000 is a cause of worry for the apparel industry. The Budget has also proposed that 60 per cent of retail sale price or the tariff value be made eligible for excise or countervailing duty (CVD) on readymade garments and made-up textile articles. Previously, the tariff value for calculating excise or CVD was fixed at 30 per cent of retail sale price.