Budget 2019: Surat textile industry not happy with decision on excise duty, fuel cess

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Ahmedabad | Updated: July 9, 2019 2:59:17 PM

Budget 2019 India: Textile industry in Surat had pitched strongly for removal of reverse charge mechanism (RCM), but it would remain the same as the finance minister didn’t even touch on the subject, said Devkishan Mangani, chairman, textile committee, South Gujarat Chamber of Commerce and Industry (SGCCI).

Budget 2019, budget, startups,budget highlights, budget 2019 date, budget 2019 PDF, budget 2019 highlights, budget 2019 income tax, budget highlights 2019 indiaBudget 2019-20: At present, the limit is just `50 lakh, which remained unchanged in the Budget.

Union Budget 2019 India: The Centre’s budgetary announcement of raising excise duty as well as road & infrastructure cess on petrol and diesel has not gone down well with those associated with Surat’s Rs 80,000 crore textile industry which directly and indirectly employs over 15 lakh people. “Surprisingly, there was hardly any mention in Budget speech about textile industry, which gives largest employment after agriculture in the country,” said Manoj Agarwal, president of Federation of Surat Textile Traders Association (FOSTTA).

“With over 50% market share, Surat is the hub of man-made fabric (polyester) in the country. Raw material for the polyester fabric is also petroleum product and it would become costlier. Moreover, transportation cost at every stage right from bring raw material, sending grey fabric to process houses and sending finished goods in market would also become dearer as already petrol and diesel prices have gone up by Rs 2.50 per litre,” he added.

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Already, textile industry in the country, including that in Surat, is experiencing rough time and hence FOSTTA had demanded dedicated ‘Garment Hub’ near Surat ahead of union Budget. Now, increase in cess on petroleum product has put additional burden on all those associated with man-made fabric manufacturing ecosystem. There are seven lakh power looms in Surat out of which nearly six lakhs are operational as around lakh are in the process of modernisation, said Agarwal. Of around 400 process houses, 80 have been shut down due to recession, he added.

Not only hike in petroleum, the industry is dejected over no change in GST provisions and limit on cash transaction. Textile industry in Surat had pitched strongly for removal of reverse charge mechanism (RCM), but it would remain the same as the finance minister didn’t even touch on the subject, said Devkishan Mangani, chairman, textile committee, South Gujarat Chamber of Commerce and Industry (SGCCI).

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According to Mangani, due to RCM, money circulation cycle has become prolonged and hence they are facing acute shortage of finance. He further said that in textile value chain at various stages, businessmen are required to do cash transaction, but due to limit of Rs 10,000 per day, many in fabric manufacturing process are facing difficulties. “We have demanded increase in the limit up to at least Rs 25,000 per day. However, it was also not considered,” he added.

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The annual turnover of the textile industry in Surat is pegged at around Rs 80,000 crore. After demonetisation and implementation of GST, production of fabric has gone down from 4 crore meter per day to 2.5 to 3 crore meter per day. The textile industry was also pitching for the removal of GST for those units whose turnover is below Rs 5 crore. At present, the limit is just Rs 50 lakh, which remained unchanged in the Budget.

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