Last years budget came as a big shock to the knitwear industry across the country when 10 per cent excise duty on ready-made garments was imposed. This year the industry has requested a waiver from this duty and the knitwear club has already sent a request to the Finance Minister as pre-budget suggestions.
Vinod Thaper,president of the Knitwear Club said,The industry is already facing a big threat from garments imported from China,Bangladesh and Sri Lanka. Due to the huge scale of production and support from their governments,their products are much cheaper compared to our products. It is not possible for our industry to increase price of its products. The garment industry in Ludhiana will be slowly wiped out and Ludhiana will lose its identity as hosiery cluster.
In addition,the popular Technology Upgradation Fund Scheme (TUFS) is going to lapse on March 2012 on new machines. The club wants that benefits should be further extended to the next financial year. The club has asked the Centre to continue this scheme so that units can get more subsidies while adding new machines to their units. TUFS had a kitty of Rs 19.72 crore,out of which nearly half has been utilised by industrialists. Most of the industrialists are however
unaware of TUFS.
Thaper reasoned that automated machines are needed to beat the labour shortage and that TUFS has already been withdrawn for reconditioned machines.
The members stated that associations like the Knitwear Club and others who are service oriented,are constituted for the upliftment of the industry and should be excluded from Service Tax. The club members stated that goods service tax should be implemented in the forthcoming budget by abolishing the central sales tax,so as to bring uniformity in tax structure,which would also give a boost to exports.