The Telegraph
Since 1st March, 1999
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Jaswant tears at garment unity garb

New Delhi, April 24: The Indian garment industry was in a state of panic today after finance minister Jaswant Singh’s announcement at an all-party meeting on Wednesday that manufacturers of excisable goods need not register themselves with tax authorities.

The sop to the small and medium manufacturers has angered the large garment makers, who fear the small guys in the business will get away without paying excise, making it more difficult for them to compete in what is already a cut-throat market. The big garment companies are interpreting this to mean a virtual rollback of the decision to remove the exemption from tax earlier given to units with a turnover of less than Rs 1 crore.

They also see a move to roll back the measure to bring the entire power-loom and hand-processed yarn and fabric sectors under Cenvat. Traders and dealers of yarns and fabrics have been granted freedom from registration.

“Segmentation within the industry should not be allowed by giving exemption. The government should not roll back the removal of exemption to companies with a Rs 1-crore turnover that it announced in the budget,” said Vikram Rao, group executive president (apparel business) Grasim Industries Limited.

Darshan Mehta, president of Arvind Brands, said: “Why should a few large and medium players bear the brunt of the tax, even as government loses revenue'” In this situation, a retail trader prefers to sell garments from the unorganised sector.

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