Excise duty on all items of textile machinery, all parts, components and accessories should be 8%, instead of 10% and second-hand textile machinery should not be allowed duty-free access, says the Textile Machinery Manufacturers Association (TMMA).
Among its many pre-budget recommendations, TMMA has recommended that imports of dedicated parts, components and accessories of shuttle-less looms, compact ring spinning machines and cone winding machines which are not made in India so far, should attract zero percent duty, to facilitate manufacturing of high tech machinery to bridge the technology gap.
It has also suggested to the Finance Minister that, floor level of customs duty on all items of textile machinery in general should be 7.5% and that the rate of duty on raw-materials, parts, components & accessories should be less than that on complete machinery and should be 5% instead of 7.5 percent.
It also wants the supply of local textile machinery under EPCG and EOU status to be treated at par and 200% weighted deduction on R&D expenditure incurred by all companies and partnership/ proprietary units.
Free import of textile machinery in second hand machines should be prohibited or restricted by stipulating a specified minimum residual life of 10 years and further subject to the condition that the second hand machinery should not be older than 5 years.
Imported second-hand textile machinery should not be given subsidy under the Technology Up-gradation Fund Scheme (TUFS) and its derivatives namely 20% CLCS and 15% CLCS Scheme, in the name of modernization. The Government should not be a party to the technological obsolescence as technology changes in a 3 to 5 year period.
Government should put ban on import of second-hand shuttle-less looms with weft insertion rate less than 700 meters per minute. Tax break for a period of 5 years for any unit manufacturing hi-tech item of textile machinery with or without foreign collaboration.
TMMA has also recommended launching a TUFS dedicated to the Indian textile machinery industry. The fund should have an interest reimbursement outlay of Rs. 250 crores for the 12th Five-Year-Plan and should be based on similar principles as the existing TUFS.
TUFS benefits should be given for expansion and modernization of existing textile machinery manufacturing companies, acquisition of technical know-how from overseas countries.
Industry segments regarded as weak or non-existing (rotors spinning, automatic winding, weaving, processing, knitting and industrial sewing equipment) should be eligible for 10% capital subsidy in addition to interest reimbursement.