Highlights in Union Budget 2012-13 for textile industry


A. For Modernisation of Mill
1. Financial package of Rs 3,884 crore for waiver of loans for handloom weavers and their cooperative societies.
2. Textile mills planning modernisation will benefit from customs duty exemption (five per cent earlier) on automatic shuttleless looms. The import duty on second hand automatic looms will also come down to 9.33% from the present 14.33%.

B. Branded Garment
1. The excise duty on branded garment has been increased from 10% to 12%, the abatement of 55% from the maximum retail price (MRP) has also been raised to 70%. This would bring down the incidence of duty as a percentage of MRP from 4.5% to 3.6%.

C. Custom Duty
1. Customs duty exemption of shuttleless looms from 5% to 0%.
2. Full exemption from basic duty is being accorded to automatic silk reeling and processing machinery as well as its parts.
3. Exemptions and the existing concessional rate of basic customs duty of 5% only to new textile machinery. Also, second-hand machinery would now attract basic duty of 7.5%.
4. The basic customs duty on wool waste and wool tops would be reduced to 5% from 15% and wool tops from 15% to 5%.
5. Basic Customs duty on Aramid thread/ Yarn/ fabric for manufacture of Bullet proof helmets for Defence and Police personnel is being reduced from 10% to Nil with Nil CVD and Nil SAD.
6. Basic customs duty on Titanium dioxide classified under CTH 2823 00 10 is being reduced from 10% to 7.5%.
7. Basic customs duty on Sintered natural uranium dioxide/ Sintered uranium dioxide pellets (U-235) classified under CTH 2844 20 00 for use in the production of nuclear power is being reduced from 7.5% to Nil.
8. Basic customs duty on Super Absorbent Polymer (SAP) classified under 3906 90 90 imported for use in the manufacture of Adult Diapers is being reduced from 7.5% to 5% alongwith Nil SAD on actual user basis.
9. The benefit of existing exemption from Customs duty on Road Construction equipment is being extended to projects awarded by Metropolitan Development Authority also.
10. Full exemption from basic customs duty is being provided to shuttle less looms, parts/components of shuttle less looms by actual users for manufacture, specified silk machinery viz. Automatic reeling silk reeling and processing machinery and their accessories including cocoon assorting machines, cocoon peeling machines, vacuum permeation machine, cocoon cooking machine, reeled silk humidifier, bale press and raw silk testing equipment.[S. No. 406 of notification No. 12/2012-Customs dated 17.03.2012 refers]. The existing concessional duty rate extended to specified textile machinery is being restricted only to new textile machinery. (The concessional rate is 5%. For used machines, the duty will be 7.5%).

D. Excise Duty & Service Tax
1. Standard rate of excise duty raised from 10% to 12%.
2. Service tax rates raised from 10% to 12%.

E. The government also plans to set up a powerloom mega cluster in Ichalkaranji, Maharashtra, with a budget allocation of Rs 70 crore. Ichalkaranji is the only place in India which produces yarn of all counts.

F. Setting up of two more mega clusters, one to cover Prakasam and Guntur districts in Andhra Pradesh and other for Godda and neighboring districts in Jharkhand in addition to 4 mega handloom clusters already operationalised. He also proposed setting up of three Weavers Service Centres, one each in Mizoram, Nagaland and Jharkhand. The Minister proposed a Rs 500 crore pilot scheme in twelfth plan for promotion and application of Geo-textiles in the North East. A powerloom Mega Cluster will be set up in Ichalkaranji in Maharashtra.

G. Basic customs duty on Hydrophilic Nonwoven, Hydrophobic Nonwoven ( CTH 56031100) imported for use in the manufacture of Adult Diapers is being reduced from 10% to 5%, With 5% CVD and Nil SAD on actual user basis.

H. Project import status is being granted for Green Houses set up for protected cultivation of Horticulture and Floriculture produce – will hurt domestic Agro Textile companies.

I. JV Defence Production will help support the modernisation of textiles used in Defence Production.

J. NHAI and Infrastructure Growth focus in the budget– will help geotextiles usage.

K. SIDBI funding for SME will help in the entrepreneur development programme in Technical Textile.

L. 200% weightage reduction in R and D in house activity.

M. Peak rate of Cenvat has been increased from 10% to 12%.

Indirect Benefits

1. One of the 5 core objectives of the budget is GROWTH IN DOMESTIC DEMAND- offers opportunities for Technical textile sector to push for non budget measures which can help domestic demand.
2. The strong emphasis on Agro growth, Horticulture, and improvement on Food yield offers opportunity for increase usage of Agro textiles.
3. National Skill development mission increase in budget can help the sector to fund its skill shortage issues too.
4. Rural infra development fund – Rs 20,000 Cr and more 8,000 kms of road network to be done.. . Can be used by geotextiles companies.
5. National urban health mission to set up – can be used to increase the usage of Medical Textiles.
6. Govt to fund Rs 5,000 Crores as India Opportunity Venture fund – to help SME companies In Technical Textiles for equity.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s