In a recent development, Indian textile industry organizations have called for an amendment to the criteria for Basic Custom Duty (BCD) exemption on weaving machines. Industry leaders have cited an inaccurate measure used by the Ministry of Finance in the current criteria, which they believe does not accurately reflect the efficiency of weaving machines. The industry is demanding that the technical criterion of Weft Insertion Rate (WIR) be used instead of the current measure of Revolutions Per Minute (RPM).
The BCD exemption was recently extended for the next two years, starting from April 1, 2023, to March 31, 2025. However, importers are required to pay duty due to the new condition added in the notification. The industry estimates that the burden of paying BCD for importing weaving machines has cost them ₹150 crore.
The South Gujarat Chamber of Commerce and Industry (SGCCI) has written a letter to the state minister of textiles, Darshana Jardosh, requesting an amendment to the notification. The letter states that leading international weaving machine manufacturers from Europe and Japan have expressed that the RPM of machines does not define their efficiency. They argue that WIR, which is expressed in Meters per Minute (MPM), is a more accurate technical criterion.
The Ahmedabad Textile Industry’s Research Association (ATIRA) has also stated that machines compatible with the Amended Technology Upgradation Fund Scheme (ATUFS), covered under the textile commissioner’s office circular, use WIR as the definition for weaving machines. Top global producers of weaving machines, such as European manufacturers Picanol and ITEMA, and Japanese company Toyota, have also certified that the efficiency of weaving machines is measured in WIR.
Himanshu Bodawala, the president of SGCCI, sent the letter to the ministry of textile, stating that industry representatives have approached the ministry of finance to request an amendment to the notification. Ministry officials have communicated that any request for amendment should come from the ministry of textile to the Tax Research Unit (TRU) of the ministry of finance. Therefore, the ministry of textile needs to send its recommendation to the ministry of finance.
The ministry of textile has convened a meeting on May 10, 2023, to discuss the issue. Ashish Gujarati, immediate past president of SGCCI, highlighted that weaving machines with 220 RPM, the norm for shuttleless Rapier looms, cannot meet the current 650 RPM criteria for BCD exemption. The industry hopes for a resolution that accurately reflects the efficiency of weaving machines and is eagerly awaiting the outcome of the meeting.
The industry sources speculate that the condition was added to restrict the import of weaving machines. However, the textile industry considers imported machines more efficient than domestic ones. The issue is still being discussed, and the industry hopes for a resolution that accurately reflects the efficiency of weaving machines.