Tirupur Garment industry appreciates budget proposal
The Budget proposal to extend the life of the Technology Upgradation Fund for textile industry was hailed by Tirupur Exporters' Association, which foresaw huge benefits for the stakeholders. Finance Minister P Chidambaram, in his Budget speech for 2007-08, proposed increasing the provision of funds under TUFS to Rs 911 crore against Rs 535 crore in 2006-07 and extending it to the 11th plan.In addition to this, the increased allocation of fund from Rs 189 crore in 2006-07 to Rs 425 crore in 2007-08 for integrated textile parks would also boost the textile industry, TEA president A Shaktivel said. Reacting to the budget proposals, Shaktivel said extension of TUF scheme would largely benefit the textile industry and modernisation of machinery would take place across the industry.
Reduction of peak rate of customs duty from 12.5 per cent to 10 per cent for capital goods would also help industry while going for modernisation. Reduction in customs duty on polyester fibres and yarns from 10 per cent to 7.5 per cent would extensively help the garment sector. TEA thanked Chidambaram for maintaining the general CENVAT rate and service tax at the same level and also reducing Central Sales Tax from four to three per cent. However, the association was disappointed with the continuance of Fringe Benefit Tax and increase in education cess from two to three per cent on all taxes.
Another major concern was extension of service tax for renting of immovable property for use in commercial business, which would result in increasing production cost.
