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Budget 2004-a lot at stake for textiles sector |
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2004-7-9
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The Union Finance Minister P Chidambaram announced a new tax regime for the textile industry calling for mandatory abolishment of Cenvat.
Presenting the Union Budget 2004, in the parliament today, he proposed a series of measures that would have far reaching implications of the future of the industry, as a whole.
The Budget 2004 has:
* Uniform duty rate at 4 percent applicable for pure cotton sector consisting of yarn, fabrics, garments and made-ups.
* For blended textiles sector and pure non-cotton sector, 8 percent uniform duty rate will be applicable.
* Pure Cotton Textiles, Silk and Non-Leather Footwear to be cheaper.
* Concessional customs duty of 5 percent on capital goods enjoyed by the leather industry extended to the non-leather footwear industry.
* Excise duty increased from 8 to 16 percent on imitation jewellery and parts of clocks and watches.
* Finished leather of all kinds exempt from customs duty. Patent leather also included.
Among other proposals were:
* Regeneration of Traditional Industries fund worth Rs. 100 crore to be set up for traditional industries, namely coir, handloom, handicrafts, sericulture, leather, and other cottage industries. The details, including mechanism for utilization of the fund will be worked out in consultation with the industries concerned.
* VAT to be implemented from April 2005.
* Peak rate of Customs Duty to continue at 20 per cent.
* Commerce Ministry to introduce bill to regulate Special Economic Zones. The New Trade Policy to be unveiled by this month-end will contain strategy for boosting exports including SEZs.
* 85 items off SSI list.
* Small-scale loans cap raised up to Rs 1 crore.
* Increase in the ceiling for loans under the scheme from Rs.40 lakh to Rs.1 crore.
* 2% education cess imposed on income tax, corporation tax, excise duties, customs duties and service tax. |
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