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G. Srinivasan

NEW DELHI, April 8

THE Apparel Export Promotion Council (AEPC) Chairman, Mr Virendra Uppal, has pleaded for procedural simplification and enhanced drawback rates, following the withdrawal of excise and small-scale industry (SSI) exemption covering the garment export units in the Union Budget 2003-04.

In a recent meeting with the Revenue Secretary, Mr C.S. Rao and the Chairman of Central Board of Excise and Customs (CBEC), Mr M.K. Zutshi, the AEPC Chairman drew attention to the steep reduction in all industry duty drawback rates announced on April 1 (to be effective from April 7) for woven and knitted garments by 12.5 per cent and 16.66 per cent when compared to the previous year.

Though the reduction in the peak rate of the customs duties had been reflected in the drawback rates appropriately, the new excise duty rates on powerloom, knitted fabrics in the Budget had escalated the incidence of total excise duty. This aspect had been totally sidestepped. As such, he said, "there is merit in increasing the duty drawback rates over the prevailing rates prior to April 6, 2003".

He said that while the garment exporters were not averse to getting them registered with the Central excise authorities, their cause of concern stemmed from the "extra non-value paperwork" this entailed which would boomerang on transaction cost. He said the trade at large was concerned about the likely hardships due to "Inspector Raj" and "harassment" in export production and further documentation. AEPC also pleaded that garment export units should not be subject to visit by Central Excise authorities.

As Rule 10 of Central Excise demands each garment exporter to maintain proper records on a daily basis about such things as description of the goods produced, opening balance, quantity produced, inventory of goods, quantity removed, assessable value, the amount of duty payable and details about amount of duty paid, Mr. Uppal said that it would be difficult for the garment exporters to keep such exhaustive records. "The industry is of the apprehension that the cumbersome record- keeping is not possible", he said.

In this context, garment exporters might be allowed to keep records of production and clearance as provided under simplified procedures of exports meant for SSI units in conformity with the CBEC's circular issued in 1996 and its amendment notification issued in June 1998.

Stating that the Central excise procedure was altogether a new subject for the garment exporters who had been enjoying exemption from this impost, Mr Uppal said the Government had notified the procedure only on March 25 to be effective from April 1. As time available at the disposal of thousands of exporters all over the country producing Rs 25,000 crore business was insufficient for grasping the procedures, there was utter confusion over registration formalities.

Hence, AEPC had sought an extension of the registration period by a month along with a simplified procedure scheme. Besides, he said the garment exporters should not be subjected to mandatory requirements in the intervening period from formalities such as registration, declaration of stocks and record keeping and that their exports should not be stopped merely on such grounds.

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