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Cenvat duty on handloom and powerlooms withdrawn. Instead, a new tax regime for the textile sector introduced
Mandatory Cenvat chain abolished
No mandatory excise duty on pure cotton, wool and silk, be it fibre, yarn, fabric or garment
Blended textiles and pure non-cotton items like polyester, viscose, acrylic and nylon to have a different tax regime
Mandatory excise duty on man-made staple fiber at 16% imposed
2% education cess on all taxes
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Duty on textile machinery reduced from 20% to 10%
Duties on polyester and nylon chips, textile fibres, yarns and intermediates, fabrics, and garments reduced from 20% to 15%
Excise duty on Polyester Filament Yarn reduced to 16%
Allocation of Rs 4.4 bn for Technological Upgradation Fund (TUF) and a 10% capital subsidy scheme introduced for the textile-processing sector
30 products related to hosiery and knitting exempt from the reserved category.
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Allocation to the Technology Upgradation Fund (TUF) enhanced from Rs 4.4 bn to Rs 5.4 bn.
Provision for the interest subsidy on term loans to the handloom sector to be increased from Rs 2.0 bn to Rs 2.4 bn.
Rs 1.9 bn to be provided for the Scheme for Integrated Textiles Parks (launched in October 2005 with the intention of creating 25 textile parks).
Excise duty on all man-made fibre yarn and filament yarn to be reduced from 16% to 8%.
Import duty on all man-made fibres and yarns to be reduced from 15% to 10%.
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