Government urged to reconsider duty drawback rate

The government urged to reconsider the decision to reduce the duty drawback to knitwear export sector from 7.6 to two percent as it would hit hard the garment sector in neighbouring Tirupur export garment sector said , Tirupur Exporters Association president Raja M Shanmugham.

It has come as a rude shock to exporters, who are already facing severe competition in the global market, he said and appealed to the government to have a re-look at the issue.

He further said that if buyers look to go out of the country due to higher prices it would be very difficult to bring them back, since they would stick to competitor countries like Bangladesh, Sri Lanka, Cambodia and Vietnam.

He also expressed apprehension that this may lead to more job losses, since 80 percent of the garment units fell under the MSME category.

Meanwhile, Southern India Mills Association chairman P Nataraj in a statement, appealed to the Finance Ministry to have a re-look at the rates applicable for textiles stating that this move was not in tune with the earlier announcement of the government about boosting exports and job creation.

Also the Ministry should take steps to refund all the blocked, embedded taxes, levies and accumulated input tax credit on fabric especially, processed fabric and announce a positive package.