The Indian Union Budget 2016 for the ‘Textiles & Apparel’ industry has been a mixed bag. Highlights include the following:
- Branded garments and Luxury Goods retailing at Rs. 1000 and above will now attract more excise duty. The levy of excise duty has been increased from zero to 2% on goods without Canvat credit and from 6% to 12.5% on goods with Cenvat credit.
[Cenvat (Short for Central Value Added Tax)- The CENVAT credit scheme allows a manufacturer as well as a service. provider to avail credit of duty of excise paid on inputs or capital goods and. service tax paid on input services. Such credit could be utilised for payment. of duty of excise on final products or service tax on the taxable output.]
- Spinners and wearers will be able to procure fibres and yarns at cheaper cost. Basic Custom Duty on specified fibres and yarns reduced from 5% to 2.5%.
- The Textiles and Apparel industry in India is the 2nd largest employment provider after agriculture. With growing competition from nearby countries with world class manufacturing hubs the skills of millions working in this industry sure need upgradation | upskilling to operate new modern machinery and increase productivity and efficiency of the industry on the whole. The allocation of Rs. 1804 Crores (across industries) to set-up 1500 multi-skill development centres will be a boon to #MakeinIndia and will help the Indian kaarigar with right skill sets.
- Upgrading the Textile Industry- through allocation of Rs. 3500 Crore is another positive boost. The allocation includes Rs. 200 Crores for rural development, Rs. 300Crores for Mega clusters development and Rs. 1400 Crores for amended TUF’s (Textile Upgradation Funds).
Refer the infographic for a quick overview of the Impact of Budget 2016 on the Textile & Apparel industry in India.
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