Govt Sops to promote Textile industry and export segment
Rising cost of input, stiff competitive global market and higher borrowing cost are the major threats faced by the textile industry. Government has been taking continuous measures to promote textile industry and export segment.
Major steps by Government: -
General reduction of 4% in CENVAT rates. As a result, the textile machinery will have CENVAT of 10% and Non-cotton textile will have 4% CENVAT vide Notification No. dtd. 07.12.2008.
Rate of duty on cotton textile and the textile articles has been reduced from 4% to Nil vide Notification No. dtd. 07.12.2008.
NAPHTA imported for generation of electric energy has been exempted from import duty vide Notification No. dtd. 07.12.2008.
The benefit of Service Tax refund is now extended to service provided by a clearing & forwarding agent to exporters vide Notification No. dtd. 07.12.2008.
The Threshold limit of refund of service tax paid by exporters on foreign commission agent service has been enhanced from 2% of FOB value to 10% of FOB value of exports vide Notification No. 33/2008-ST dtd. 07.12.2008.
Draw back benefit can now be availed of simultaneously with refund of service tax pad in respect of exports.
Pre and post - shipment export credit for certain specific sectors including textiles is being made more attractive by providing an interest subvention of 2% upto 31/03/2009 subject to minimum rate of interest 7% per annum.
An additional allocation of Rs. 1400 Crores will be made to clear the entire backlog in TUF Scheme.
All items of handicrafts will be included under 'Vishesh Krishi & Gram Udyog Yojana.
To boost collateral free lending, the current guarantee cover under Credit Guarantee Scheme for Micro and Small enterprises on loans will be extended from Rs.50 lakh to Rs.1 crore with guarantee cover of 50 percent.
This information was given in the Rajya Sabha yesterday by the Minister of State for Textiles, E.V.K.S. Elangovan