Watch industry demands excise duty cuts

New Delhi, Nov 14: The All India Federation of Horological Industries (AIFHI), a body representing the country's watch industry, has urged the government to provide tax sops and take steps to curb illegal imports to become a Rs 778-crore business.

AIFHI President Harish Bhat asked the government to increase abatement rate on watches from the present 35 per cent to 50 per cent and rationalise the duty structure by reducing the excise duty to 8 per cent from 16 per cent.

Mr Bhat also undrelined te need to curb illegal imports of watches.

''With the illegal imports of watches, the industry suffers a lot and so does the Government's revenue,'' AIFHI President Harish Bhat told reporters here.

If the Government accepts all three proposals, the sector's revenue could go up to Rs 778 crore from the present Rs 275 crore, he added.

He also demanded a reduction in the import duty on high-end watches to encourage official imports in the luxury segment, as its share is almost negligible across the country.

If all the proposals are met, the Government's exchequer will grow up to 250 per cent by 2009-10, with the industry size reaching Rs 4,750 crore from the current Rs 2,746 crore.

There are 20,000 watch retailers across the country, with over 1,00,000 families involved in the industry currently, AIFHI Vice Presently V D Badhwa said.

Mr Badhwa said in India the share of below Rs 1,000 watches is around 80 per cent, which is covered by the unorganised sector that hardly pays any duty to the government.

Calling it as a prospect segment, he gave emphasis on this low-end watches in the interest of common people and requested the government to exempt the duty on these products.

As per the industry estimates, over 60 per cent of the total four crore watches sold are smuggled or made out of smuggled parts, Mr Badhwa said.

UNI