Apparel Online India Magazine August 1st Issue 2018 | Page 43

INDUSTRY LIVE
Government reduces GST rates; provides
relief to the anxious textile industry
The 28th Goods and Services Tax
(GST) Council meeting yielded
positive results for the Indian
textile industry. The centre reduced
tax rates on overall 50 products in
a bid to attract traders and middle-
class sections. Regarding textile, it
also decided to allow input credit on
man-made fabric equivalent to 7 per
cent, providing a level-playing field
to synthetic textile manufacturers
through a uniform tax rate on the
entire value chain. The revised GST
rate will be applicable from July 27.
The move will cut effective GST on
synthetic fabric to 5 per cent from
12 per cent earlier.
The Council also agreed on the
refund of Input Tax Credit (ITC)
at fabric stage that brought a huge
relief to the textile sector. There
has also been reduction on the
rate of Chenille fabrics and other
fabrics under Heading 5801 and
handloom dari from 12 per cent
to 5 per cent, which is a big win
for the textile manufacturers
who were previously reeling
under immense pressure. This is
expected to benefit around 40,000
textile workers who have lost
their jobs in the last one year. The
Council has even given leverage to
traders, who generate turnover of
up to Rs. 5 crore, to file the return
quarterly.
The Confederation of Indian
Textile Industry (CITI) heaped
praises for the Government for
this move saying that this step
taken by the Central Government
will not just enhance the country’s
economy but will also improve
its domestic and overseas export
sector. Sanjay K. Jain, Chairman,
CITI, said, “The industry was
waiting for these steps since a very
long time as it is already facing a lot
of problems in competing with its
competitors in the global market.
We have been continuously asking
the Government to provide relief to
the fabric segment for the overall
growth of the textile sector, as it
provides sizeable employment
opportunities – 40 jobs on Rs. 1
crore investment – which is more
than any textile value chain sector.”
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