With the > Union government proposing excise duty of two per cen t (without Cenvat) or 12.5 per cent (with input tax credit) on branded readymade garments and made-ups of retail price of Rs.1,000 and above, the prices of garments and made-ups are expected to go up by five to six per cent.
According to Rahul Mehta, President of the Clothing Manufacturers Association of India, the excise duty is on 60 per cent of the MRP. Currently, the market is sluggish. With further price increase, it will be a nail in the coffin.
Manufacturers with own brand will also see an impact. Further, manufacturers will want to keep the cost of the products low and it could lead to compromise on quality.
