New Delhi, Jan 24 (KNN) The Apparel Export Promotion Council (AEPC) is urging for tax concessions to be provided to apparel manufacturers who adopt Environmental, Social, and Corporate Governance (ESG) standards, along with other international quality benchmarks.

In addition to this plea, the council is specifically addressing the Goods and Services Tax (GST) issue, proposing a uniform tax rate of 5 per cent across the entire Man-Made Fibre (MMF) value chain, encompassing fibre, yarn, and fabric.

Currently, the GST rates for MMF are disparate, with fibre taxed at 18 per cent, yarn at 12 per cent, and fabric at 5 per cent. This imbalance leads to unutilised input credit and liquidity challenges for Micro, Small, and Medium Enterprises (MSMEs), as highlighted by the AEPC.

In anticipation of the upcoming budget presentation on February 1, the council is also seeking budgetary support for the branding and marketing of products made in India.

Recognising the high cost of capital as a major hurdle for the exporting community, AEPC is requesting an increase in rates under a particular scheme to 5 per cent for all apparel exporters.

This adjustment, the council argues, will enhance the competitiveness of the apparel industry in the global market by enabling easier access to necessary working capital.

The council stated, "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.”

Furthermore, the AEPC is recommending the inclusion of trimmings and embellishments under Import of Goods at Concessional Rates (IGCR) duty rules.

Trimmings and embellishments play a crucial role in maintaining the desired functionality and aesthetics of garments in the global market.

The council emphasises that including these items in the duty exemption list will allow Indian apparel exporters to use pre-approved trimmings and embellishments, contributing to brand consistency and quality, as required by foreign buyers.

The council also argued "Indian apparel exporters are constrained to use only those trimmings and embellishments, which are pre-approved by the buyer and these are mostly required to be sourced from overseas suppliers nominated by the garment buyers."

(KNN Bureau)