Karnataka Hosiery and Garment Association (KHGA) has urged the Union finance minister, Arun Jaitley to reconsider the proposals in the Union Budget for imposition of two per cent excise duty on branded products with MRP of Rs 1,000 and above. In his letter to the minister, chairman of the taxation committee of KHGA, Sajjan Raj Mehta writes textile industry of which hosiery and ready-made garment is an integral part has been dealt a severe blow with the imposition of such tax.

He appealed to the FM to urgently examine the matter to save the industry as two per cent duty will increase cost of garments by five to six per cent when those will reach the customers. With GST likely to rollout within 2016 itself, Mehta said, we fail to understand the logic of making the industry go through the travails of excise regime for a short period. There are hundreds of items still outside the realm of excise, and the garment industry could well be one of those till such time GST is introduced.

The textile industry is trying to get back on its feet after suffering a major setback due to escalating prices of cotton. Levying the excise will not only result in greater torment for the industry members but will give rise to mass unemployment. It is also feared among the industry associates that levying this excise may give rise to increase in corruption. And most important it will add fuel to the already flaring inflation fire, Mehta observed.