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Our Economic Bureau
NEW DELHI, DEC 12: Around 3,000 to 4,000 textile fabric processing houses, 90 per cent of which are in the medium and small scale sector, will benefit from the simplified excise scheme notified by the government on Friday.
The new scheme is expected to net around Rs 675 crore during 1998-99 against Rs 604 crore during the preceding year.
A finance ministry notification to this effect was placed in Parliament on Thursday.
Under the scheme, that will come into force from December 16, the rate of levy will be Rs 1.5 lakh per chamber per stentor per month in the case of fabrics of average value not exceeding Rs. 30 per square metre. The rate will be Rs 2 lakh per chamber per stentor per month in cases where the average value of processed fabrics exceeds Rs 30 per square metre.
The acreage value will be computed taking into account the total value and quantity of processed fabrics cleared during the preceding financial year.
Earlier, all the manufacturers of processed textile fabrics had been governedby ad valorem-based levy.
The new scheme follows the initiative taken by the textiles ministry. In fact, textiles minister Kashiram Rana termed the earlier level of levies on processing units as too steep and unbearable while explaining to reporters details about the scheme on Friday.
He hoped that the new scheme would provide the much-needed relief to the processing units in the textile industry and also help plug tax evasion.
The notification says the scheme applies only to processed woven textile fabrics of cotton, man-made filaments and man-made staple fibres falling under chapter 53, 54 and 55 and of the Central Excise Tariff.
The scheme also applies to independent processors of textile fabrics who are engaged exclusively in this activity and have the facility in their factory for heat-setting of fabrics with the aid of a hot air stentor and applies uniformly to all such processors. The independent processors who are covered under the simplified scheme will not, however, be eligible for thecredit of duty paid on inmpits or capital goods under the Modvat scheme, it is further clarified.
For purposes of levy under the simplified scheme, a chamber of rail length up to 3.05 metres will be construed as one chamber and if the rail length exceeds 3.05 metres, the number of chambers will be calculated on a pro rata basis.
Three-pronged strategy to revive NTC mills on cards
The textiles ministry is considering a three-pronged strategy to revive the National Textile Corporation's ailing mills.
Rana said this while unveiling the new excise scheme for textile units on Friday that out of 119 sick mills under NTC's charge, nearly 50 per cent are now fully or partially closed. The strategy would determine the number of viable and non viable mills and extend the voluntary retirement scheme (VRS) to workers affected by the closure. The VRS would be on the pattern adopted by the Gujarat government which envisages an additional payment of Rs 50,000 to Rs. 60,000 per worker (equal to 45days'wages). Of the Gujarat pattern was adopted, it would place an additional burden of Rs 800 to Rs 850 crore on the Central government, Rana explained.
He also said that as part of the budget proposals for 1999-2000, his ministry had recommended to the finance ministry to reduce the import duty on sophisticated machinery for manufacture of fabrics from 20 to 10 per cent. The customs duty on state-of-the-art machinery for ready-made garments had already been reduced from 20 to 10 per cent.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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