Duty Drawbacks

EXCISE DUTY STRUCTURE FOR MAJOR ITEMS OF TEXTILE INDUSTRY

1) Excise duty includes Textile & Textile Articles (AT&T) @ of 15% of BED upto 2004-05 Budget.

2) MODVAT Scheme was extended up to cotton yarn/man-made fibre, blended/spun yarn stage in the year 1994-95.

3) MODVAT scheme extended to processed fabric stage from 1996-97 budget Restriction of MODVAT credit to the extent of 95% proposed in the budget 1998-99 was withdrawn in the budget 1999-2000 and replaces as "CENVAT" scheme in the budget 2000-2001.

4) The compounded levy of stenter chamber base duty to independent processors has been abolished in the budget 2001-2002. However, the processors having a investment less than Rs. 3 crore have been given option vide notifiction No. 20/2001 (CE dated 30th April, 2001) can opt eligible advalorem rate of duty or compounded levy of Rs. 2.5 lakh per stenter chamber for process fabric up to Rs. 30/- per sq. mtr. and Rs. 3 lakh per stenter chamber for the process fabric exceeds Rs. 30/- per sq. mtr and this scheme is also abolished in 2002-03 budget.

5) Specified 40 items of processing machinery under list 6 exempted from Excise Duty.

6) Deemed Credit Scheme is withdrawn in 2003-04 budget.

7) In 2004-05 new tax regime for textile sector introduced, no mandatory excise duty on pure cotton, wool and silk whether it fibre, yarn fabrics or garments or blended textiles. The Cenvat may be optional. Every manufacturer whether it is handloom or powerloom or composite mill will have option to change between two routes one will be exemption route and other will be cenvat.

8) AED(ST) and AT&T has been withdrawn in the budget 2004-05 w.e.f. 9-7-04 vide notification No. 32/2004-CE and 31/2004-CE.

9) In 2004-05, Budget, Eduction cess @ 2% is levied on aggregate duty of Central Excise.

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