Subject
: Facilitation measures
pertaining to textiles - Reg. *****
In Budget 2003-04, major changes in the excise duty structure on
textiles and textile articles were announced.
These measures included reduction of excise duty rates on
polyester filament yarn, fabrics, garments and technical textiles.
In order to complete the Cenvat chain in the textile sector,
certain exemptions and optional duties, which were causing breakage in
the Cenvat chain, were withdrawn. To
bring the excise duty structure on textiles at par with that of the
other sectors, deemed credit was also withdrawn and credit was made
available on the basis of duty paying documents.
Customs duty on many of the vital textile machinery was
substantially reduced. Simultaneously, major incentives for
modernization and upgradation of the entire textile sector, particularly
of powerlooms were also announced. The underlying rationale was to give
our textile sector a boost so as to enable it to adequately meet the
challenge of international competition expected from 2005.
The new scheme provides a level playing field for all the textile
sectors and makes duty evasion unattractive.
It also aims to attract investments in the textile sector. The
handloom sector remains, as before, totally unaffected.
Now, additionally, a number of procedural simplification and
facilitation measures have been announced.
These measures are aimed at a smooth implementation of the
scheme, specially for the new assessees. It is expected that with these
measures the textile industry would function smoothly.
2.
The salient
features of these additional measures are as follows:
a)
Power
loom weavers, having an annual turnover of Rs. 35 lakhs (earlier Rs. 25
lakhs) will now have excise duty exemption for the first clearance of
Rs.25 lakhs (earlier limit Rs. 20 lakhs) during the year.
Similar exemption will henceforth also be available to
manufacturers of shoddy blankets, terry towels, fabrics made from
monofilament, rubberized textile fabrics, woven and unprocessed cotton
belting and round mesh mosquito net fabric. (Reference:
Notification No. 47/2003-Central Excise dated May 17,2003 communicated
in Trade Notice No. 72/2003 dated 22.05.2003)
b)
Small or
self-employed manufacturers of readymade garments (unbranded or bearing
the brand of the manufacturer) now having an annual turn over of Rs. 40
lakhs (earlier Rs. 30 lakhs) will have excise duty exemption for the
first clearance of Rs. 30 lakhs (earlier Rs. 25 lakhs) during the year.
Further, incidental processes like putting price tags, washing
instructions or altering of the garments done by the traders or
retailers will be fully exempt so as to avoid their coming under any
kind of harassment. (Reference:
Notification No. 47/2003-Central Excise dated May 17,2003 communicated
in Trade Notice No. 72/2003 dated 22.05.2003)
c)
Considering
that a number of manufacturing activities in textile sector are
undertaken on job work basis, the job worker has been allowed option to
remain entirely outside the purview of the central excise duty. The
procedure already provides that the principal manufacturer complies with
all these formalities. (Reference:
Notification No. 24/2003-Central Excise (Non Tariff) dated March 23,
2003 communicated in Trade Notice No. 39/2003 dated 27.03.2003)
d)
A one time
credit was announced on textile
inputs lying in stock, as on 1.4.2003, on the basis of self-declaration
of such stock, as given by the manufacturers and traders themselves.
There will be no verification of such stock by the department.
The last date for declaring such stock would now be 26.5.2003.
This will not be extended any further. (Reference:
Notification No. 43/2003-Central Excise (Non-Tariff) dated May 12,2003
communicated in Trade Notice No. 70/2003 dated 13.05.2003)
e)
For stock
valuation earlier a limit of Rs. 10,000 per loom had been announced.
This is now being enhanced to Rs. 20,000 per powerloom, of stock of yarn
and finished goods. Other details will be issued through departmental
circulars. However, as announced by the Finance Minister, this will not
have retrospective application or consequences.
f)
The process
of registration has been simplified for the textile sector by
prescribing a simple one-page application form.
Registration is also being granted in cases where the assessee
does not have PAN. In such
cases, registration is given on the basis of a temporary number.
All officers of the excise department have been directed to
assist the new assessees in completing these formalities.
The local trade associations have been requested to obtain
registration for their members. (Reference:
Notification No. 38/2003-Central Excise (Non-Tariff) dated April 22,
2003 communicated in Trade Notice No. 60/2003 dated 24.04.2003)
g)
In order to
establish and continue the Cenvat chain, without causing difficulties to
the exempt textile sectors, it has been permitted that an exempt unit or
a trader in textile can endorse, in full, the duty paying document of
his inputs in favour of the buyer of his goods.
This can be done without being registered with the department. The buyer would be eligible for full credit of duty on the
basis of this document. (Reference:
Notification No. 28/2003-Central Excise (Non-Tariff) dated April 1, 2003
communicated in Trade Notice No. 49/2003 dated 03.04.2003)
h)
Acknowledging
the fact that in weaving and garment manufacturing sector, many units
function in common premises, such individual units have been permitted
to take separate registrations. The
clearance-based exemption would also apply considering them as separate
units. (Reference:
Board's Circular No. 713/29/2003 CX dated May 7, 2003 communicated in
Trade Notice No. 69/2003 dated 09.05.2003)
i)
Officers of
the central excise department have been given strict instructions not to
visit any textile unit unless they are authorized by the senior officers
for a specific task. It is
requested that any incidence of such unauthorized visit may be
immediately brought to the notice of the Commissioner of Central Excise
concerned who have been directed to take immediate action.
The departmental officers have also been instructed to condone
procedural lapses by the manufacturers and traders unless it is done
with intent to defraud the exchequer.
Though the duty for clearances during April, 2003 was due by the
5th May, 2003, the assesses have been permitted to deposit
such duty by 5th of June, 2003 considering that at the
initial stages they may be ignorant about this requirement. (Reference:
Board's Circular No. 714/30/2003 CX dated 14.05.2003 communicated below)
j)
For the
unprocessed fabrics weavers and manufacturers of readymade garments, the
filing of return would be on quarterly basis.
Even in other cases where the filing of such returns is on
monthly basis, the date for filing return pertaining to April 2003 has
been extended from the prescribed date of 10th May 2003 by
one-month i.e. to 10th June 2003. (Reference:
Board's Circular No. 714/30/2003 CX dated 14.05.2003 communicated below)
3.
Any person desirous to know about the procedures and duty rates
relating to textile sector can contact the nearest central excise office
or Commissioner of Central Excise to obtain suitable advice.
It is hoped that the trade associations will play a major role by
conducting training sessions for their members with assistance of the
local central excise officers. It is expected that with the enactment of Finance Bill and
announcement of these additional facilitation measures the textile trade
would now function smoothly, gradually modernizing itself to face the
international competition.
The contents of the Trade Notice may be brought to the notice of
all concerned. (Issued
from file C.No. IV/16/ 2 /2003 CX. Pol. Vol. II) [Authority
: Press Note dated 15.05.2003 from Shri. Gautam Bhattacharya, Director (TRU)]
Sd/-
(P.V.R. REDDY)
ADDITIONAL COMMISSIONER (TECH.)
To As per Mailing List (Both Department
& Trade) --------------------------------------------------------------------------------------------------------------------- COPY
OF BOARD'S CIRCULAR NO. 714/30/2003- CX (F. No. B3/5/2003-TRU dated
14.05.2003
In continuation of Board's Circular No.
713/29/2003-CX dated 7.5.2003 issued from file of even number clarifying
certain doubts relating to the excise duty structure on textiles and
textile articles announced during and after Budget 2003 announcements,
the undersigned is directed to issue further clarifications on the
subject as follows:
Issue
No. 1:
In the above referred Circular it was clarified that in case a
number of manufacturers of fabrics and readymade garments and clothing
accessories operate from a common premises, though carrying out
individual manufacture and clearances and having distinct legal
entities, then for the purposes of notification Nos. 34 and 35/2003-CE,
both dated 30th April, 2003, the machines / looms belonging
to a specific manufacturer should be treated as a 'factory'. In this
regard it is further clarified that such powerloom units / garment
making units could be registered individually. Therefore, the erstwhile
directions, that an assessee has to have distinct and separate premises
shall not apply in case of such powerloom or garments / accessories
manufacturing units.
Issue
No. 2:
Under Central Excise Rules, 2002, an assessee is required to pay
duty for the clearances during a month by the 5th of the
subsequent month. Similarly, he is required to file return for the
previous month by the 10th of the subsequent month. As the
budget proposals for 2003-04 pertaining to textiles have brought a large
number of new assessees who are not fully conversant with the excise
procedures, many of such assessees did not pay the duty on their
clearances during April, 2003 and also did not file the monthly return
in time. Considering the circumstances, specific orders have been
obtained from the Finance Minister that as a one time measure, the last
date for duty payment and that for filing of return for the clearances
made during April, 2003, is extended to 5th June, 2003 and 10th
June, 2003 respectively. In view of this, the field formations are
directed not to take any action for the delay.
Issue
No. 3: Vide notification No. 47/2003-CE(NT) dated 14.05.2003, one time credit (under Rule 9A of the CENVAT Credit Rules, 2002) on the stock of inputs, contained in the finished product, lying as on 1.4.2003 has been extended to certain yarns and knitted or crocheted articles of apparel or clothing accessories. It is possible that some of the manufacturers or traders who have filed their declaration of stock prior to 14.05.2003 have not declared the stock of the above mentioned items, for the reasons that they were not covered under Rule 9A or notifications issued thereunder. Such manufacturers can file additional declaration declaring the stock of the above mentioned items and claim one time credit thereon provided such declaration is made within the date prescribed under Rule 9A i.e. 26.5.2003.
(Gautam Bhattacharya) Director (TRU) |
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