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Centre extends 16% excise duty to unbranded garments

The Centre on Tuesday extended the 16 per cent excise duty on branded garments to the unbranded ones in order to provide a level-playing field in the sector.

Clothing accessories including handkerchiefs, shawls, scarves, mufflers, veils and ties, raincoats and undergarments have, however, been exempted from the purview of the 16 per cent excise duty.

Finance Minister Yashwant Sinha while moving the Finance Bill in Parliament last week had announced that the 16 per cent excise duty on branded garments would now be extended to unbranded garments.

The excise duty will be effective from Tuesday and it will be payable by the garments manufacturers and not the workers who are known in the excise parlance as merchant manufacturers.

The Revenue department notification also states that the benefit of the Small Scale Industry Excise Duty Exemption Scheme has been extended to ready-made garments.

"This means that clearances upto Rs 10 million beginning with May 1, 2001 in the remaining part of the financial year 2001-02 shall be exempted from excise duty," it said adding that duty paid on clearances effected before May 1, would not be eligible for refund.

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