The Apparel Export Promotion Council has sought increase in the rate of depreciation on plant and machinery.
Mr A. Sakthivel, Chairman, AEPC, said the Government had reduced the rate of depreciation from 25 per cent to 15 per cent in 2005-06. This assumes a life span of plant and machinery at 25 years.
However, machinery used in the garment industry is susceptible to frequent technological changes, he said in a memorandum submitted to the Finance Minister.
Severe competition in the export trade makes it essential that the plant is modernised every four years. Under this circumstance, the depreciation rate should be reversed to the previous level of 25 per cent, he said.
VALUING FOR CAPITAL GAINS
The value fixed by the State Government for stamp duty purposes is adopted while computing capital gain on sale of immovable properties. “This method is totally unscientific,” said the association.
Adoption of guideline value can be disputed by an assessee with the Departmental Valuation Officer, but there is no provision in the electronic returns for this, said Mr Sakthivel.
Valid and genuine transfer of property lower than guideline value must be taken out of the purview of the provision of Section 50C. In case of persons carrying on small business, the provision requires either eight per cent of turnover as profits or a lower figure, provided the books are subjected to audit. This eight per cent as net profit is substantially high in case of certain small business who cannot afford the cost of getting their accounts audited, he said.
Other demands
The other demands include: Waiver of TDS (tax deducted at source) on foreign agency commission since they are provided outside India; increase the investment limit in plant and machinery of SME units from Rs 10-25 crore to make knitwear export units competitive in the global market ; remove 10 per cent excise duty on branded readymade garments; remove five per cent basic customs duty on manmade fibre imports; allow duty-free import of machinery to manufacture and process synthetic garments and fibres to boost investment in synthetic garments, which has a major market globally and the excise duty for man-made fibre should be made zero which will help to increase the usage of man-made fibres