SIMA hails duty hike on imported polyester fabrics

In the GST regime, countervailing duty has been replaced with IGST and the special additional duty has been scrapped. Polyester attracted 10 per cent basic customs duty, 12.5 per cent CVD and 4 per cent special additional duty in pre-GST regime. Consequent to the scrapping of 4 per cent additional duty and levy of 5 per cent GST on polyester, imported polyester attracted 10 per cent basic customs duty and 5 per cent IGST. Therefore, there was a significant drop in the import duty threatening the survival of the domestic manufacturing industry due to cheaper imports especially from countries like China. Therefore, the industry had represented to the Government and the GST Council to increase basic customs duty on fabrics to retain the competitiveness of the domestic manufacturing industry. Accordingly, the Government has increased the basic customs duty on polyester from 10 per cent to 20 per cent with effect from October 27, 2017.

P Nataraj, Chairman, the Southern India Mills’ Association (SIMA) thanked the Union Textile Minister, Union Finance Minister and the GST Council for favourably considering the representation made by the association and increasing the basic customs duty on polyester from 10 per cent to 20 per cent thus encouraging “Make in India” programme. He has stated that since manmade fibre price in India is expensive by 20 per cent to 30 per cent due to high incidence of duties and levies, there was a threat of cheaper imports especially countries like China. SIMA Chief has stated that the increased basic customs duty would reduce the imports. Nataraj has stated that there is a need to increase the import duty on cotton fabric also on par with polyester fabric in the interest of powerloom and handloom sectors to sustain their competitiveness.