Apparel exporters seek tax incentives in Budget 2024 to boost manufacturing
AEPC on Wednesday sought tax incentives such as uniformity in GST and enhanced interest subsidies to boost domestic manufacturing and India's outbound shipments. The Apparel Export Promotion Council (AEPC) asked to provide tax concessions to apparel manufacturers adopting Environmental, Social, and Corporate Governance (ESG) and other international quality standards and compliances. The council also sought budgetary support for the branding and marketing of made-in-India products.
The Budget is scheduled to be presented on February 1.
The council said that interest equalisation rates were revised downward from 3 to 2 per cent for non-MSME (Micro, Small and Medium Enterprises) manufacturer exporters under the interest equalisation scheme on pre-and post-shipment export credit.
«High cost of capital has been a major bottleneck for the exporting community.
AEPC has requested the government to increase the rates under the scheme to 5 per cent for all the apparel exporters,» it said, adding it will increase the apparel industry's competitiveness in the international market and enable them to avail necessary working capital.
Regarding the Goods and Services tax (GST), it said that a uniform tax of 5 per cent only should be levied across the entire MMF (Man-Made Fibre) value chain (fibre, yarn and fabric).
Currently, the MMF GST rate on fibre is 18 per cent, yarn 12 per cent, and fabric 5 per cent, resulting in unutilised input credit and consequent liquidity issues for MSME units, the council added.
