As the Union Budget for present fiscal is just round the corner, different industrial houses have started formulating strategies for the year ahead.
Fibre2fashion started an untiring journey to accumulate information in its endeavour to comprehend the demands, expectations, and suggestions from industry. Manufacturers of technical textiles, intimate wears, cotton yarns, and retailers responded positively regarding their requirements to run a smooth business throughout this financial year. Suggestions of each enterprise are vital for the industry to contribute more in overall socio-economic development of the country.
Mr Ashish Bharat Ram, Managing Director, SRF Limited, the leading Indian player in Technical Textiles, told, “The rupee appreciation through the course of the year, along with high interest rates and energy costs has put a huge strain on the manufacturing sector. Since inflationary pressures will not allow much change on this front, we hope that the peak customs rates do not undergo any change.
“In addition, there are huge anomalies in the excise structure across the petrochemical chain which leads to CENVAT accumulation. If this can be harmonized, it will make business life far easier. The opening of the education sector is another area which needs to be looked at closely if we are to ensure that we have enough skilled people to meet the country’s growth aspirations.”
Mr D P S Kohli, Chairman, Koutons Retail India, asserted, “Service tax on commercial rents should be abolished as rental is part of income, without any value additions and no point in taxing it again. It's a major cost for-the retail industry.
Service tax paid on logistics should be adjustable with same on rents. Further, Vat should be uniform all over India with no further taxes imposed by the individual states such as octroi, entry tax, turnover taxes and free movement of goods all over India without any hindrances of C-Forms/F-Forms. Corporate taxes should be lowered and most importantly, infrastructure and labour laws should be improved.”
Mr Sachin Gupta, Director, Bodycare International Ltd, manufacturer of intimate wear, opined, “Reformations of labour law, providing adequate infrastructure to industry at affordable prices are utmost requirement of the moment. Further, Import Duty cut specially on Capital Goods and Raw Material will quite add to the competitiveness. The cut in Income Tax Rate is something which entire corporate world is looking forward to.”
Gujarat Ambuja Exports Ltd engaged in manufacturing of 100 percent cotton yarn also participated in this earnest attempt of Fibre2fashion. Mr Vijay Kumar Gupta, Chairman and Managing Director, asserted, “Government should enhance DEPB rates for ring spinning cotton yarn from 3 to 6 percent and drawback credit for ring spinning cotton yarn should be raised from 6 to 8 percent. Under this scheme, at present the value cap is Rs12 per Kg. The value cap should be increased to Rs15 per Kg.
“Presently, in case of CENVAT credit, drawback rate is 2 percent for export of cotton yarn. This condition should be removed and the same should be allowed to take the DB benefit at 8 percent and CENVAT credit. Reimbursement of TUF interest of 4 should be raised to 7 percent. Additional capital subsidy of Rs2 crore must be given for captive power project under textile industry.
“During last few years the service tax has been enhanced to 12.50 percent and more services are included year after year. Inspite of this, there was no relief in income-tax and personal taxation. Thus, Government should scale down the Corporate Income-tax and Personal IT rates.
“The Government should work out arrangements for committed supply of lignite at fix rate for captive power generation use. Last but not least, the Government should not increase VAT rates even to compensate the proposed reduction in CST.”
Each of the business houses is optimistic that when the Union Finance Minister, Mr P Chidambaram stands up to declare the budget for this year, all their suggestions would be taken into consideration.
