Now, branded jeans to cost more by 25%

Jeans and other apparel were already getting costlier due to the rise in input cost of cotton. Now, Union finance minister Pranab Mukherjee has decided to levy excise duty of 10% on branded garments and made-ups of textiles. Jeans and garment manufacturers believe that the duty, coupled with rising cost of cotton, will now make such clothes dearer by more than 20-25%.

They are planning to take up the issue with the union government.
The minister has converted optional duty on readymade garments and made-ups into compulsory duty with a view to expanding the base. "The industry is already reeling under great pressure and the addition of 10% excise duty on garments will be the final nail in the coffin of the industry," said Vijay Purohit, president of Gujarat Garment Manufacturers Association (GGMA).

Chintan Parikh, chairman and CEO of Ashima Ltd, believes that 10% excise duty on the garment industry is too high. "Garment manufacturers will not be able to get modified value added tax (modvat) from anywhere as textile industry is out of excise regime. As a result, garment industry is going to suffer and prices will go up," said Parikh, who is also president of GCCI.

"Branded jeans will now be costlier by Rs350. Rising prices will surely hit the demand but it's difficult to say by how much," said CFO of Arvind Ltd, Jayesh Shah.

"It seems that the prices of garments will shoot up," said managing director of Aarvee Denims, Ashish Shah. Manufacturers fear harassment from excise department. "With the new move, the textile industry will be harassed by the excise department," said director of Nandan Exim, Dipak Chiripal.

Garment manufacturers want a rollback of the proposal. "The central government had imposed excise duty on the garment industry in the first term of UPA but cancelled it following
representation from the industry,"
said Purohit.
He said the GGMA would stage protests if the government did not roll back the duty imposition.