To provide a lifeline to the distressed readymade garment industry, the finance minister has accepted the demand to restore the 'zero excise duty route' for cotton and spun yarn sector at the yarn, fabric and garment stages.
In the case of cotton there will be zero duty at the fibre stage as well; and, in the case of spun yarn, there will be a duty of 12 per cent at the fiber stage. In the Budget 2013-14, finance minister P Chidambaram announced that 'zero excise duty route' will be in addition to the already available CENVAT route.
He also proposed to totally withdraw excise duty from handmade carpets and textile floor coverings of coir or jute. Extending the relief to ship building industry also, Chidambaram proposed to exempt ships and vessels from excise duty. Consequently, there will be no CVD on imported ships and vessels.