Assocham urges interest equalisation of 3% in yarn exports in 2018-19 budget

New Delhi, Dec 26 (IANS) Assocham on Tuesday urged the government to provide interest equalisation of three per cent in respect of yarn exports in the budget for 2018-19, with a view to boost yarn exports and ensure that domestic product can compete in global markets.

As part of its pre-budget recommendations on indirect taxes submitted to the Centre, the industry lobby also requested that two per cent of the benefits of the Merchandise Exports from India Scheme (MEIS) be extended to the spinning sector as the recent spike in raw material and other input costs have made the industry’s survival difficult.

On the Technology Upgradation Fund Scheme, Assocham requested that sufficient provision be made in the Union Budget 2018-19 to take care of old left out cases and the current dues.

“While this scheme has been operating since 1999 and has been prevalent over the period with various amendments and is currently valid up to March 2022, during last 3-4 years there have been problems in its implementation,” the Assocham pre-budget memorandum on indirect taxes pointed out.

The chamber urged the government to reduce the hank yarn obligation by half from the current level of 40 per cent.

Assocham sought abolition of customs duty on import of wool fibre, stating: “The apparel grade wool of fine micron (25 micron and finer) and other animal hair are not available indigenously in our country as such the woollen industry is dependent on imports.”

The industry chamber requested the Centre to reduce the Goods and Services Tax (GST) on man-made fibre from 18 per cent to 12 per cent so that it is fully set-off at the yarn stage.

Seeking exemption from payment of GST on export of goods, the industry chamber said under the present system, an exporter has to pay IGST on export of goods, which is refunded to him on submission of shipping bills which involves blockage of working capital for a long time.