Ludhiana Member of Parliament and the National spokesperson of the Congress party,Manish Tewari has demanded abolition of the Central Excise Duty on ready-made garments. In a letter addressed to Union Commerce Minister Anand Sharma,Tewari said it was after the intervention of the Congress president Sonia Gandhi that the duty had been abolished in 2004 as she had expressed concern over the harassment faced by textile garment manufacturers due to the Central Excise Duty regime imposed by the then BJP-led NDA government. Tewari stated that over the past six months,ever since the new Central Excise Duty regime has become effective,he has received hundreds of representations from his constituents as well as from garment hubs across the country detailing the harassment small and tiny garment manufacturers are being subjected to as a result of this mandatory levy. I am sure that a large number of them would have also met the minister with regard to their predicament,he said. Referring to his meeting with Sharma,Tewari said,As we have discussed the most desirable situation would be if the earlier optional Excise Duty regime is restored and those who wish to avail of Cenvat credit may opt for it. He added that if the finance minister wishes to persist with the new Central Excise Duty regime then the incidence of taxation could be shifted to Yarn manufacturers who can then collect the duty from their buyers and remit the same to the government. In this manner,Tewari pointed out,the government would receive the revenue for which it has converted this optional taxation into a mandatory one and millions and millions of small garment manufacturers would be saved from the harassment of a coercive tax collection mechanism. He also suggested that it would be appropriate if the Yarn manufacturers could be consulted on this proposition before a final call is taken though he said an informal interaction with some of them suggested that they may not be averse to the proposal.
