Ready-made garments are set to be cheaper by 7-8% with Union Finance Minister P Chidambaram exempting them from excise duty, the apparel industry said on Thursday.
The step will give a much needed relief to the industry which has been facing sluggish phase, they added.
"With Centre exempting ready made garment industry from paying excise duty, the garments will now be cheaper by 7-8%," Ludhiana based Duke Group Chairman Komal Jain said.
Chidambaram today exempted ready made garments from excise duty ambit in Budget 2013-14. Earlier, garment makers had to pay 3.6 per cent excise duty on MRP value of garments compulsorily irrespective of claiming input tax credit or not.
"Now, ready made garment maker will not have to pay excise duty on MRP value of garment if input tax credit has not been claimed," said Vardhman Textiles, CGM, I J Dhuria said.
"We welcome the move by Union finance minister to bring the ready made garments out of excise duty net. It will certainly provide impetus to the garment industry," Nahar Group owned Oswal Woollen Mills, ED, Sandeep Jain said.
The garment industry had been seeking withdrawal of excise duty or a moratorium till the introduction of Goods and Service Tax (GST).
Meanwhile, Union Information and Broadcasting Minister Manish Tewari, who is MP from Ludhiana, today expressed his gratitude to Chidambaram for exempting ready made garment industry from excise duty.
Tewari had personally led a delegation of the hosiery manufacturers to meet Union finance minister in the month of January for getting their demand included in the Budget.
Tewari said: "Union Minister P Chidambaram has understood and appreciated the concerns of the industry and this was reflected in his Budget speech."
He said there are about 14,000 hosiery units in Ludhiana employing about 5 lakh people and added that this will not only help the hosiery industry to overcome the hardships but also ensure that there is no negative impact on employment.