Garment Export and Manufacturers appeal to PM and FM for Review of 7 Budget 2021 provisions

Garment Export and Manufacturers appeal to saving garment export industry from further disaster

Hon’ble Prime Minister
Hon’ble Finance Minister

We are the Largest Employment Generators (12.9 million) from the economically weaker sections of the society, close to 70 pc of which are women. 80 pc of manufacturers are Micro and Small Enterprises.

Industry has boon struggling for International Market Share in last few years duo to intense competition from some neighbouring countries supported by their respective governments. Our product is close to perishable commodity and we have been dealt the most severe financial blow by the Covid-19 pandemic. Our industry is experiencing the slowest recovery due to closure of overseas retail stores

Review / Rollback of following provisions of Budget 2021-2022

1. RoDTEP rates not announced for apparel exports, even though industry was getting RoSCTL (same concept as RoDTEP) until 31.12.2020. At a time when international business is looking for new sourcing destinations, this makes India uncompetitive-it amounts to exporting our taxes. Immediate Release of RoSCTL wef 01.01.2021 pending announcement of RoDTEP
2. Restoration of serial no 311 (Trimmings and Embellishments) and the entries relating thereto under MoF, DoR notification no 2/2021- Customs did 01-02-2021 because it has hurt Micro and Small Enterprises most and secondly it amounts to taxing export inputs. Only 4% of total import entitlement was used in the year 2019 – 2020 suggesting only a rational use by the industry
3. Deletion of condition 108 of notification no. 2/2021 – Customs dated 01.02.2021 inserted against S No 257 of principal notification no 50/2017 dtd 30-06-2017 as it is fundamentally against Ease of Doing Business principles. It requires submission of bond for each import consignment, resulting in custom clearance delays and order compliance delay not acceptable to Importers
4. Proposed amendment in clause 114 of the Finance Bill 2021-22 must not be carried out as it will lead to severe liquidity crisis for MSEs. IGST route i.e. exporter can export the goods on payment of IGST (without LUT) and opt for IGST refund, should be continued specifically for MSME and AEOI Status Holders
5. Removal of new 10% Duty and Cess on cotton imports. Only extra long cotton (3.5 pc) being imported and almost entirely exported after value addition. Imported cotton is a totally different market segment and has no bearing on domestic cotton market. This will only end up taxing inputs to exports
6. Bankruptcies by customers during Covid times have resulted in huge losses for our exporters. Industry requests that Government not insist on return of RoSCTL and duty drawback on goods exported as this was a once in a life time force majeure event. Exporters should not be double penalized
7. Supply of cotton yam by EPCG license holders to garment exporters may be considered towards discharge of export obligations under EPCG scheme

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