Apparel Exporters Urge Govt To Announce Tax Incentives In Upcoming Budget, Remove MSME 45-Day Payment Norms

The AEPC also asked for an extension of concessional tax rate for new manufacturing units to boost the establishment of new garment units and liberalisation of procedures for e-commerce export.

The Ready Made Garments (RMG) industry also called for a removal of Sec43B (H) of the IT Act. This section pertains to the payment to MSMEs within a 45-day timeline to claim tax deductions.

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The Apparel Export Promotion Council (AEPC) on Saturday called on the authorities to announce tax incentives in the upcoming Budget. The exporters body urged the government to remove the provision that requires payments to be made to MSMEs within 45 days to claim deductions and custom duty exemption on garment machinery imports.

The body also requested for the Budget 2025 to announce an interest equalisation rate of 5 per cent, reported PTI. Other demands presented by the AEPC included an extension of concessional tax rate for new manufacturing units to boost the establishment of new garment units, liberalisation of procedures for e-commerce export, and simplification of the process of imports of trims and embellishments under the Import of Goods at Concessional Rate (IGCR).

The Ready Made Garments (RMG) industry also called for a removal of Sec43B (H) of the IT Act. This section pertains to the payment to MSMEs within a 45-day timeline to claim tax deductions. Issuing a statement, the body said this has resulted in an tax liabilities and also disturbed the cash flow of exporters.

The statement also called for an increase in the cap per consignment of export value under e-commerce to minimum Rs 25 lakh and an extension in the export realisation period to 12 months.

The garment export sector in the country is heavily dependent on imported machinery to maintain quality and compete at the global level. The body said that elevated import duties make Indian garments exports less competitive in comparison to countries such as Vietnam and Bangladesh.

Therefore, the body recommended to continue the existing exemptions and also slash the customs duty to zero on reamining garmenting machinery to help boost the sector’s efficiency.

Sudhir Sekhri, Chairman, AEPC, said, “The Union Budget is a great opportunity where our demands for long-term policy support can be considered.”