Increase in excise duty on branded clothes would not benefit the SMEs: Garment Industry

New Delhi, Feb 29 (KNN) The increase in excise duty on readymade garments with retail price of Rs 1000 or more would impact the garment industry but not benefit the small manufacturers, said an industrialist.

The Union Budget 2016-17 proposes to raise the excise on readymade garments with retail price of Rs1000 or more to 2% without input tax credit or 12.5% with input tax credit.

In his Budget Speech, Finance Minister Arun Jaitley said, “I propose to change the excise duty on branded readymade garments and made up articles of textiles with a retail sale price of Rs 1000 and above from ‘Nil without input tax credit or 6%/12.5% with input tax credit’ to ‘2% without input tax credit or 12.5% with input tax credit’.

Responding to this, Animesh Saxena, MD of Neetee Clothing said, “The announcement is not going to benefit the MSMEs much as people who buy branded clothes would still continue to buy it and not shift to the local garments.”

Saxena however said that the move would negatively impact the retail sector. (KNN Bureau)