Industrialists in Tirupur knitwear cluster are delighted as Union Government on Friday had accepted their pleas and made fresh changes with respect to availing of zero duty benefits under Export Promotion Capital Goods (EPCG) scheme for machinery import.
The new changes announced on the day, subsequent to the direct representations made by Tirupur delegation led by Tirupur Exporters Association president –elect Raja Shanmugam to Union Ministers over last few months, was that the person who runs a unit that carry out job works for the exporters could avail the zero duty benefits for machinery import by simply getting classified as ‘Common Service Provider’.
This has come as a big relief as the garment industry was facing problems subsequent to an amendment in the Foreign Trade Policy that came into effect from July 1 last year, mandating the job working units in printing, dyeing and knitting, and other segments to establish a direct link between machinery imported and the finished goods exported.
The said amendment last year had compulsorily made the EPCG licence holder to show documents such as copy of agreement entered between the licence holder and the ultimate exporter undertaking to export the goods manufactured, proof of despatching goods from the licence holder’s factory to the exporter’s firm and lorry receipt to show logistical movement, among others, to get the zero duty benefits for machinery import.
Prior to that, the exporter only has to show the job working unit’s EPCG licence number in the export document to enable the job working unit to get the duty benefits.
“The new changes enable the printing, knitting and dyeing units which are dependent heavily on imported machines to yet again get the full benefits of duty exemption”, said Mr. Shanmugam.
“The new changes enable the printing, knitting and dyeing units get the full benefits of duty exemption”
