AEPC Seeks Zero Duty On Sewing Machine Imports

New Delhi, October 28: | Updated: Oct 29 2002, 05:30am hrs
With two years left for phasing out the entire export quotas under the WTO agreement on textiles and clothing (ATC), the garment industry is faced with high customs duty on imported sewing machines required for modernisation thereby affecting its competitiveness in the global market.

The total duty incidence works out 26.67 per cent because of the countervailing duty (CVD) on imported machines with in-built motors, says the Apparel Export Promotion Council (AEPC).

Though the imported sewing machines without in-built motors have been exempted from the CVD, they now attract a concessional 5 per cent duty under a notification issued by the revenue department soon after the presentation of the 2002-03 budget.

Council has contented that exporters using imported machines with in-built motors have been experiencing productivity losses due to what it calls non-synchronisation of the machines with locally made motors. On the other hand, imported machines are gradually replacing the old models by equipping energy saving in-built motors, the council has pointed out.

Stating that the purpose of allowing imports at 5 per cent has therefore been defeated, the council has urged the government to exempt such machines from the purview of the CVD. It also has suggested that certain other machines which are being used by the industry for export production be included in the list of concessional imports and exempted them from the CVD. The additional machinery items are garment and blasting/brushing machine, hook and bar machine, hydro-extractor machine, garment washing machine, waistband attracting machine, label inserting machine and profile cutting machine.

The council has drawn the governments attention to the customs notification issued in April which has allowed imports of certain fabrics of total length up to 200 metre during one financial year.

The council, however, considers this length to be insufficient for exporters to follow their buyers instructions for developing new samples. For, buyers are keeping themselves busy during almost all-broad seasons.

Yet another problem faced by exporters arises from submission of quarterly returns under a simplified procedure notified by customs. The council notes that the Reserve Bank has been monitoring forex earning realisations and submitting quarterly returns is not only time consuming and a duplicate exercise, but is also adding to the already high transaction cost.

The council has, therefore, suggested that small exporters registered with the council be allowed to submit half-yearly returns to the jurisdictional assistant commissioner of the Central Excise.

Further, to safeguard governments revenues, the half-yearly returns may be verified by a chartered accountant duly sealed and signed before it is submitted to the Central Excise authorities.