Budget 2024 Expectations: The Apparel Export Promotion Council (AEPC) has urged tax incentives, including uniformity in GST and increase in interest subsidy, to encourage domestic manufacturing and boost India’s exports.

AEPC has urged for tax concessions to apparel manufacturers adhering to international quality standards and compliances as well as adopting environmental, social and corporate governance (ESG) practices.

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The Council also sought budgetary support for branding and marketing of products manufactured in India.

The council said the interest equalization rates under the Interest Equalization Scheme on pre- and post-shipment export credit for non-MSME (Micro, Small and Medium Enterprises) manufacturer exporters have been reduced from 3 to 2 percent.

“High cost of capital has been a major hurdle for the exporter community. AEPC has requested the government to increase the rates under the scheme by 5 per cent for all apparel exporters,” it said, adding that this will enhance the competitiveness of the apparel industry in the international market and enable them to obtain the required working capital.

uniform gst

With regard to Goods and Services Tax (GST), it states that a flat tax of only 5 per cent should be imposed on the entire MMF (man-made fibre) value chain (fibre, yarn and textile).

The Council said that currently, the MMF GST rate on fiber is 18 per cent, 12 per cent on yarn and 5 per cent on fabric, resulting in unutilized input credit and liquidity issues for MSME units.

Further, it suggested that the government should include trimming and embellishment under the Import of Goods (IGCR) duty rules at concessional rates.

The functions involved in the apparel export business essentially involve a variety of quality embellishments and embellishments (tags, labels, stickers, belts, buttons, linings, inter-linings, etc.) to ensure the desired functionality and aesthetics of the garments in the global market. Is required. ,

To maintain their brand image, foreign buyers place emphasis on maintaining consistency and quality and avoiding the use of counterfeit products.

It states that any deviation in specification and quality results in rejection of the shipment.

The Council highlighted, “Indian apparel exporters are obliged to use only those embellishments and embellishments that are pre-approved by the buyer and are required to source these mostly from foreign suppliers nominated by the apparel buyers. it occurs.”

It added that at present, certain trims and embellishments items are not entitled to duty exemption.

“AEPC has submitted a list of items that are currently not permitted, such as draw cords, elastic bands/tapes, metal tabs/stoppers/clips, Velcro tapes, leather badges and D-rings, and requested that These items should be included in the list. For eligibility for fee exemption,” AEPC said in a statement.

It has also urged that minimum wastage at the rate of 10 per cent should be allowed under IGCR rules for import of trimming and accessories by issuing appropriate notification.

This will help the apparel exporters to submit their utilization details on time and execute the bond at customs release.

Budget 2024 Date: The budget is to be presented on February 1.

(With PTI inputs)