INDIA
Textile industry expects growth with GST rate revision
The man-made
fibres and yarns
were slotted under
18 per cent GST
rate while the
fabrics were slotted
under 5 per cent
GST slab with a condition of no refund
of Input Tax Credit (ITC) at fabric stage.
This had created a huge accumulation
of non-refundable ITC with the weavers
and blockage of working capital.
Now, with reduction of GST to 12 per
cent, this problem will be subsided
to a larger extent and will be more
manageable.
–
Narain Aggarwal, Chairman, The Synthetic & Rayon Textiles
Export Promotion Council
By announcing
reduction of GST
rates for MMF
yarns and its
products from
18 per cent to
12 per cent, the
GST Council has met a long pending
demand of the textile industry. It will
help strengthen the entire textile
value chain and make Indian textile
industry globally more competitive.
The announcement has sorted out a
big issue of inverted duty for the MMF
products as it was causing serious
issue of escalation of the cost of
synthetic products which was further
leading to cheaper imports from the
competing countries like China and
Indonesia. As of now, there is no
refund of ITC at fabric stage and under
post-GST regime, with abolition of 12.5
per cent Countervailing Duty and 4
per cent Special Additional duty, the
import has become much cheaper
option than sourcing fabrics from the
domestic market.
I hope that the GST Council
would soon consider refund of the
accumulated Input Tax Credit (ITC) at
fabric stage especially the processed
fabrics and also mandate the duty
drawback committee to recommend
appropriate duty drawback rates
and RoSL rates to sustain the export
performance.
–
Sanjay K Jain, Chairman, Confederation of Indian Textile
Industry
The changes
which have been
announced by
GST Council will
give a great relief
to the apparel
industry for the
immediate term, as the sector has
been facing severe liquidity crunch
after the introduction of GST. The
AEPC would like to thank the various
government departments which
have been working closely with all
the stakeholders for considering the
plea of its members and reducing
the rate of various man-made raw
material items. However, since the
duty structure remains inverted with
fabric at 5 per cent GST, we are hopeful
that the embedded taxes arising out of
this inverted structure will be refunded
to exporters through appropriate
mechanisms.
–
Ashok G Rajani, Chairman, Apparel Export Promotion
Council
The reduced rate
of GST would
greatly benefit
the spinning and
powerloom sector,
improve global
competitiveness
and clothe the poor masses of the
nation at an affordable cost. The
announcement of dates for processing
the refund cheques for July and
August exports and also the decision
for refunding a notional amount for
the remaining months and later adjust
the amount in the e-wallet April 1,
2018, would resolve the problem of
working capital blockage and benefit
the exporters. The suspension of
reverse charge mechanism till March
31, 2018 will benefit small businesses
and substantially reduce compliance
costs. The announcement of easing
the compliance burden of medium
and small taxpayers and increasing
the eligibility of composition scheme
from ` 75 lakhs to ` 1 crore, extending
the tax exemption for 100% EOU units,
Advance Licensing Scheme and EPCG
Scheme and also for the merchant
exporters with 0.1% tax payment
upto March 31, 2018 are few more
announcements that benefit the textile
industry.
–
P Nataraj, Chairman, The Southern India Mills Association
We are happy that
the government
has provided far
reaching relief
to the exporting
community. The
government
ensured that refunds for GST amounts
filed during the months of July/August
will be made available by October 10th
and 18th respectively. The government
has tried to resolve the liquidity issues
faced by the exporters.
Reducing the GST on MMF yarn
from 18 per cent to 12 per cent and
duty credit scrips from 5 per cent
to ‘zero’ would also give a boost
to exports. Other measures like
exempting export promotion schemes
like advance authorisation scheme;
EPCG from the payment of GST up to
March 31, 2018 should lead to a spurt
in investments.
–
Ujwal Lahoti, Chairman, The Cotton Textiles Export
Promotion Council (Texprocil)
The decision is
transformational.
It shows the
government’s and
GST Council’s
readiness to
listen and
accept the genuine