Despite the Centre having reduced the basic custom duty on wool varieties,manufacturers say its effect will not be seen in the price of branded woollen garments. As per the declaration in the budget presented by Union Finance Minister Pranab Mukherjee,the basic custom duty on wool top and wool waste has been reduced from 15 per cent to 5 per cent. This,however,has not led to a slash in prices of wool products available in stores. A few of the brands are saying that the prices will reduce in the coming winter,while others claim that it will not be done at all.
Sandeep Jain,Director of Nahar Spinning Mill that supplies garments to brands like Monte Carlo,said: We were already importing greasy wool on which custom duty was 5 per cent too. From greasy wool,we are making wool top and other varieties. So I dont think that reduction in custom duty will have any impact on prices of garments. Jains comment come as a surprise as the reduced duty on wool varieties was reportedly done at the behest of the industry.
At the same time,as per available information ,a few private wool manufacturing companies have reduced the price of the commodity by Rs 100 a kg after the announcement which again is not in proportion to the reduction in basic custom duty. The wool manufacturers claim that in the coming years,the price of branded products will be cheaper by a bit.
Shyam Bansal,MD of Rage knits said: Apart from reduction in the basic custom duty even the custom duty on branded garments was 45 per cent of the MRP earlier and now it has been reduced to 30 per cent of the MRP value. So the effect will be seen in the coming season.
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The reduction in excise duty has been done on garments of all kinds – woollen as well as cotton-based – but there has been no reduction in the price of branded garments in the market as of now.
The manufacturers claim that there had been hike in excise duty as well from 10 per cent to 12 per cent and hence considering the overall scenario,there will be no reduction in prices. It needs to be mentioned that wool top is the variety that is used to make fine woollen garments while wool waste is processed further to make yarn and later the wool garments.
Ashok Jaidka,Chairman of the Wool and Woollen Promotion Council,said: The reduction in custom duties will give lots of benefits to the manufacturers as well as consumers and we thank the union finance minister for this gesture. Even the duty on textile machinery and components has been reduced. A financial package of Rs 3,884 crore for the waiver of loans of handloom weavers has also been proposed,and all these efforts will boost the handloom and the spinning units,he added.
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