Compound excise notification soon

SURAT, Dec 6: A notification on compound excise duty on man-made fabrics will be formally announced in a couple of days and is likely to ...

SURAT, Dec 6: A notification on compound excise duty on man-made fabrics will be formally announced in a couple of days and is likely to give a boost to the textile processing industry, Union Textiles Minister Kashiram Rana said here on Sunday.

According to details finalised in Delhi on Saturday between the textiles and finance ministries and the department of commerce, excise of Rs 1.50 lakh will be charged per chamber per month on man-made fabric costing less than Rs 30 per metre, while those costing more than Rs 30 will attract excise of Rs 2 lakh per month, Rana said.

The minister stated that although processors would now pay less than what the excise department had been collecting from them every year, the government8217;s collection would not be affected as the new understanding left little room for tax evasion. He, however, warned of strict action against those who continued to evade excise.

Welcoming the announcement, South Gujarat Textile Processors8217; Association SGTPA president C R Patil assured the minister that tax evasion would come down. Tension between processors and excise officials would ease considerably, he added.

Making the announcement of the deal that the government intended being strict with processors throughout the country, Rana said, 8220;This problem was plaguing the industry for long. While the government had its own target of excise to fulfill, processors always alleged of harassment and highhandedness by the department. This will considerably be reduced.8221; Regularising excise and making it compound had been accepted by both the government and the textile processors.

He said he hoped that the step, along with others, would bring the required revenue to the government, increase quality production, and help revive the textile industry. Rana said that a new textile policy would be announced in January.

Reiterating the government8217;s resolve in ensuring the well-being of the textile industry, Rana stated that a branch of the Apparel Export Promotion Council AEPC, and a NIFT centre had been set up. While the council branch would be inaugurated at Ring Road on December 13, the NIFT centre will officially be declared open in January.

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Of the total 1200-odd process houses throughout the country, 400 are located in and around Surat itself. While about 85 per cent produce cloth costing Rs 30 per metre or lower, others produce cloth costing more than Rs 30 a metre. While the excise target for man made-fabric was Rs 590 crore, it managed to rein in Rs 604 crores in the financial year 1997-98. The corresponding target this year has been set at Rs 675 crores and Rana expressed confidence that despite processors having to pay less, the target would be achieved as tax evasion would reduce. 8220;But still we have about three months before the budget and the policy can be reviewed if it fails to work,8221; he said when asked if the target would be met.