The textile industry in the country is caught in the delaying tactics of the bureaucracy. On issues like customs duty cut on EPCG imports, Central Sales Tax (CST) rate cut, and duty free import of select commodities, including cotton and garments, from the least developed Afro-Asian countries, the beneficiaries are denied the concessions owing to the delay by the revenue department in notifying them. ?It is causing hardship and financial losses to various sections in textile and other industries,? Southern India Mills? Association (SIMA) sources told FE.
The latest annual supplement to the Foreign Trade Policy (FTP) has reduced the customs duty on EPCG imports by 1%. The Directorate General of Foreign Trade (DGFT) has issued the new policy-based licences and several companies have made substantial imports. ?In the absence of the official notification on the duty cut, the customs officials do not release the machinery from the ports and the importers have to pay huge demurrage charges, adding to their list of woes,? sources said.
Mills in Tamil Nadu, which buy almost 90% of their cotton requirements, over 80 lakh bales of cotton, from other states are denied the benefit of 1% cut in CST, in the absence of official notification on that, SIMA officials said.
The announcement on the CST reduction was made in the Union Budget 2008. Another benefit denied to textile mills, owing to the delay in an official notification, is from the facility for duty free imports of select commodities, including cotton and garments, from least developed countries.
?A formal notification would have facilitated import of cotton from these countries. Cotton price in the country is rising daily in spite of a bumper harvest of 310 lakh bales.? SIMA officials said.