A recent Central Board of Excise and Customs (CBEC) decision to keep sarees out of the category of made-ups has been welcomed by textile traders in Surat, which is India’s largest manmade fabric (MMF) wholesale market. On March 15, the CBEC issued a circular to classify sarees under Chapter 50, 52 and 54 of the Central Excise Tariff Act (CETA), 1985. “The CBEC circular on keeping sarees out of the ambit of central excise duty levy has come as a big relief for textile traders,” Federation of Surat Textile Traders Association (FOSTTA) President Manoj Agarwal said.

“We had strongly represented to the government that sarees are already classified under Chapter 50, 52 and 54 of the CETA Act 1985 and thus it should be kept out of Chapter 63. Our demand has been accepted and a fresh circular has been issued to this effect. Now textile traders won’t have to pay any sort of duty on retail prices of sarees above Rs. 1,000,” he said.

Until recently, made-ups attracted a two per cent excise duty on retail price exceeding 1,000 ever since Union Finance Minister Arun Jaitley imposed the tax under chapters 61, 62 and 63 of the Central Excise Tariff Act (CETA), 1985. The development had upset textile traders after which the Federation of Surat Textile Traders Association (FOSTTA) and the Southern Gujarat Chamber of Commerce and Industry (SGCCI) made a representation requesting for sarees to be kept out of the ambit of excise duty levy on a retail price of 1,000.