The Associated Chambers of Commerce and Industry of India (ASSOCHAM), has asked to reduce excise duty for textile machineries from 14% to 8% with an aim to encourage the indigenous demand and production substantially.
In a proposal submitted to the Finance Ministry, ASSOCHAM has noted that since the textile industry is not falling under CENVAT, the existing excise duty @ 14% is not moveable for the textile industry. This unfortunately has unnecessarily been increasing prices of indigenous textile machinery when supplied to domestic textile industry. A reduction to the level of 8% would reduce cost of machinery substantially and shall become competitive.
The ASSOCHAMs proposal said, "The indigenous textile machinery attracts 14% excise duty in general, plus 3% VAT plus 5 to 8% local taxes plus 2% octroi plus 2% transaction costs. Total amount of duties and taxes thus works out to anywhere 24 to 29%. The machine maker has to pay similar duties & taxes on bought out components & accessories and all incidences of such payments are not modvatable."
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