Budget 2024: The apparel sector demands GST consistency and increased interest subsidies to support local production.

The Apparel Export Promotion Council (AEPC) urges GST uniformity and enhanced interest subsidies in Budget 2024 to strengthen Indian apparel manufacturing and exports. Proposals include higher interest equalization rates, a uniform 5% GST for Man-Made Fibre, and expanded IGCR rules for trimmings. AEPC emphasizes the need for fiscal support and regulatory changes.

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In a bid to invigorate India's apparel industry, the Apparel Export Promotion Council (AEPC) has appealed for crucial reforms in Budget 2024. The council emphasizes the significance of tax incentives, calling for uniformity in the Goods and Services Tax (GST) and heightened interest subsidies to fortify domestic manufacturing and augment India's global exports.

AEPC specifically advocates for tax concessions for apparel manufacturers adhering to international quality standards and complying with Environmental, Social, and Corporate Governance (ESG) norms. The council contends that providing such incentives will not only promote quality production but also align the industry with global sustainability practices.

Furthermore, AEPC presses for budgetary assistance aimed at elevating the branding and marketing of Indian apparel products, a vital step in enhancing the sector's global visibility. The council stresses the need for increased interest equalization rates, pointing out the reduction from 3 to 2 percent for non-Micro, Small, and Medium Enterprises (MSME) under the interest equalization scheme.

AEPC emphasizes the significant hindrance posed by the high cost of capital for the exporting community and requests the government to raise the rates under the scheme to 5 percent for all apparel exporters. This move, according to the council, would alleviate financial constraints and facilitate necessary working capital for sustained industry growth.

Addressing GST concerns, AEPC proposes a uniform 5 percent GST across the entire Man-Made Fibre (MMF) value chain. Currently, differential rates lead to unutilized input credit and liquidity issues for MSME units. The council contends that a streamlined GST structure would promote efficiency and competitiveness within the sector.

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Moreover, AEPC suggests expanding the Import of Goods at Concessional Rates (IGCR) duty rules to include trimmings and embellishments. This adjustment would simplify the garment export trade by enabling the duty exemption of currently ineligible items. The council submits a list of items, including draw cords, elastic bands/tapes, metal tabs/stoppers/clips, velcro tapes, leather badges, and D-rings, urging their inclusion for duty exemption eligibility.

AEPC concludes by proposing a minimum waste allowance of 10 percent under IGCR rules for the import of trimmings and accessories, a move aimed at promoting sustainability and reducing production costs. Secretary General Mithileshwar Thakur expresses optimism about the government's response to these suggestions following extensive industry consultations, anticipating positive outcomes for the apparel sector's growth and competitiveness in the global market.