Industry & Economy
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Knitwear & Hosiery
Knitters decry Cenvat net
G. Gurumurthy
COIMBATORE, Feb. 28
THE rationalisation of excise duty structure for the textile sector aimed at completing the `Cenvat' chain announced in the Union Budget presented by Mr Jaswant Singh on Friday has brought in the knitwear industry into the excise net for the first time.
With the extension of the duty, the knitted fabric and knitted garments have been brought under the excise duty ambit. Along with this, the Finance Minister has also removed the `deemed Cenvat' credit hitherto enjoyed by the textile producers in both the knitted and woven sectors thereby ending the practice of claiming Cenvat credit without paying the excise duty at yarn stage.
Even during the last Budget, the Centre while introducing the excise duty on woven fabrics on optional basis, attempted to extend the same optional excise duty route for the knitwear industry too but chose to stop the move finally.
The present Budget proposal to include the knitwear sector in the excise duty incidence has been strongly opposed by the Tirupur-based knitwear industry with the Tirupur Exporters' Association (TEA) which has claimed that the move would cast acute administrative complications and unnecessary hardship for the knitwear industry.
In his reaction to the Finance Ministry's proposal, the TEA President, Mr A. Sakthivel, has pointed out that at present there were more than 500 intermediary producerswould have to get registered with the excise authorities.TEA has asked the Centre to reconsider the decision to extend the `Cenvat' chain to the knitwear industry.
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