Hike in service tax will make industry uncompetitive, says AEPC

Unsatisfied with some Union Budget proposal, Garment exporters body AEPC  increase in service tax would make the industry uncompetitive in the global market.

Expressing his views, Apparel Export Promotion Council (AEPC) Chairman Virender Uppal told PTI that they requested Finance Minister Arun Jaitley to re-consider their suggestions such as giving 3 per cent interest subsidy for the sector.

"Full taxes are not refunded by the government for exports as such further increases in excise duty to 12.5 per cent and service tax to 14 per cent would make the industry further uncompetitive," Uppal said in a statement.

The garment industry, he said, was expecting favourable announcements in the Budget.

He urged the ministry to take a re-look at their suggestions submitted before the Budget, as the sector is labour intensive and generates Rs 1 lakh crore revenue through exports.

Uppal also suggested an increase in the rate of duty on imported inputs used for export purposes.

The Finance Minister has proposed increase in service tax to 14 per cent from 12.36 per cent.