COIMBATORE: The Government's decision to allow job working units to import machinery under the EPCG (export promotion capital goods) scheme has brought cheer to garment exporters in Tirupur. Job working units including knitting, dyeing and compacting units among others registered as 'Common Service Provider' (CSP) are now permitted to import machinery under EPCG Scheme.
Incidentally, the Commerce Ministry allowed exporters to claim duty exemption under the EPCG scheme for the orders they place with job working units last September. Job working units importing machinery under the EPCG scheme can claim total exemption for duties.
But they have to fulfil export obligation by shipping garments to the tune of six times the duty exemption claimed in value terms over six years. Job working units fulfil this obligation with the support of exporting units.
"The new relaxation in condition for registration with indirect tax authorities would provide the much needed relief to the job working units in Tirupur cluster", said Raja M Shanmugham, President, Tirupur Exporters' Association.
He however pointed out that only CSPs located in Tirupur ('Town of Export Excellence' are eligible to import machinery under EPCG Scheme. Units located outside Tirupur town are not eligible. "We would be taking up the issue with the Commerce Ministry to give a relaxation in this condition also, as more number of job working units are located in the periphery of Tirupur town in places like Uthukuli, New Tirupur, Palladam while dyeing/printing units are located in Perundurai SIPCOT premises," Raja Shanmugham said.