The RPM requirement for weaving machine exemption from Basic Custom Duty (BCD) has drawn criticism from organisations in the Indian textile sector.
The exemption was extended by the Ministry of Finance for an additional two years, from 1st April 2023 to 31st March 2025.
Importers must pay duty due to the new condition specified in the notification. The industry is requesting that the notification be changed to reflect Weft Insertion Rate (WIR), which they claim to be a more precise technical requirement, in place of the RPM criteria.
A minimum RPM of 650 is required for shuttleless Rapier looms in order to qualify for BCD exemption, according to the notification issued on 29th March 2023. The minimum RPM for shuttleless Waterjet looms is 800, while the minimum RPM for shuttleless Airjet looms is 1,000 RPM or higher.
The State Minister for Textiles, Darshana Jardosh, has received a letter from the South Gujarat Chamber of Commerce and Industry (SGCCI) inquiring about the situation.
Leading international weaving machine manufacturers from Europe and Japan are mentioned in the letter as having stated that, in contrast to the requirements of the notification, the RPM of machines does not define their efficiency. They contend that, if necessary, Weft Insertion Rate (WIR) should serve as the basis for the proper technical requirements.
According to the SGCCI, domestic organisations hold comparable views. According to the Ahmedabad Textile Industry’s Research Association (ATIRA), machines covered by the textile commissioner’s office circular’s definition of weaving machines as compatible with the Amended Technology Upgradation Fund Scheme (ATUFS) also employ WIR.
The efficiency of weaving machines like Rapier Looms, Projectile Looms, and Airjet looms is measured in WIR, which is expressed in Metres per Minute (MPM), according to top global producers of weaving machines like European manufacturers Picanol and ITEMA and Japanese company Toyota.
SGCCI President Himanshu Bodawala wrote a letter indicating that representatives from the industry had contacted the Ministry of Finance to ask for a modification to the notification about the proper definition for BCD exemption on the import of weaving equipment.
According to information provided by ministry representatives, the Tax Research Unit (TRU) of the Ministry of Finance shall receive any requests for amendments from the Ministry of Textiles. As a result, the Ministry of Textiles must inform the Ministry of Finance of its recommendation.
The BCD that weaving companies had to pay for importing such machines is estimated by the industry to have cost them Rs. 150 crore.
According to certain industry sources, the restriction was included to prevent the import of weaving machinery. However, the textile sector views imported machinery as being more effective than domestically produced equipment.
