Outlook English - Print Subscribers Copy Outlook English, 26 February 2018 | Page 54

G ST BLUES
Tall Pile-Up
Of Worries
SO CLOSE-KNIT
A COMMUNITY
Knitwear exports
Exporters, workers in the city are settling to a tough
rhythm. Things may improve from April, some hope.
`26,000 cr
(2016-17)
Percentage of
knitwear exports 46
Knitwear for
domestic market ` 16,000 cr
Total employment 6 lakh (direct),
2 lakh (indirect)
Knitting units 750
Dyeing & bleaching 400
Printing 500
Export units 1,500
Domestic and job
work units 3,000
Embroidery 350
Other ancillary
units 1,100
Compacting and
calendaring 750
Total 8,350 units
G.C. SHEKHAR
by G.C. Shekhar in Tirupur
B
UNDLES of bright-hued knit-
wear are tied together and sto­
cked in front of shops to attract
buyers. The half-a-dozen roads
in Tirupur’s Khaderpet market
are crammed with shops that
stock up these apparel in every nook
and corner, throwing up crazy colour
combinations. If only the business was
as bright as the clothes.
The buyers at this market near the rail-
way station are usually roadside vendors
from Bangalore, Hyderabad, Mumbai and
some upcountry cities looking to sell
cheap knitwear to a huge population that
buys clothes for necessity and not fashion.
“For more than a year, these regular buy-
ers can be seen only in a trickle,” says
Jaffer Mohammed, who has seen his
monthly sale of Rs 40,000 fall by half since
DeMon and GST. “Ahead of last Diwali,
there was good demand. That has flat-
tened out. The GST has made our buyers
to wait and watch as so many adjustments
are being made to the rates. Maybe from
54 OUTLOOK 26 February 2018
IDLING AWAY It’s a long wait for
customers at Khaderpet market
April, things will stabilise.”
This used to be a cash-and-carry market,
but demonetisation changed all that. So,
any trader from across the country now
comes armed with a cheque-book and
deposits it in the seller’s account. The
cheque takes two days to clear. After that,
he takes away his bundle of clothes. Post
GST, many sellers of this market took
their GST numbers so business did not
suffer. “But our regular buyers refused to
pay up even the 5 per cent of GST for fin-
ished cotton goods,” says Jaffer. “They do
not want up to lock up their capital. They
are looking for ways to circumvent GST.”
No wonder the traders of Khaderpet
market are idling. They are praying that
the GST effect would wane just as it has
for the knitwear exporters. When GST
kicked in, the exporters numbering 1,500
units found themselves mired in loads of
paperwork due to manual procedure for
refund claim, delay in claiming refund for
input tax credit for the period prior to
GST, sorting out the confusion over IGST
replacing custom duty exemption....
“From July to September, it was confu-
sion all round,” says S. Sakthivel, executive
secretary of Tirupur Exporters’ Associa­
tion (TEA). “Even the officials were clue-
less about some of the provisions. It has
taken this long for some clarity to dawn
after the GST for job works was trimmed
to 5 per cent from 18 per cent. Even now
dyes and chemicals suffer an 18 per cent
GST, which makes claiming income-tax
claims cumbersome.” Even then, so far
one has received only Rs 3 crore out of the
Rs 75 crore as I-T refund, he complains.
The exporters and their job workers
have gradually settled into the new regi-
men. They fear that smaller countries like
Bangladesh, Vietnam, Sri Lanka, Camb­
odia and Ethiopia would nose ahead of
India by taking advantage of their duty-
free status or free trade agreements with
the EU and USA. The Indian government
must come up with incentives for apparel
exports, says the TEA. “It is time to look
beyond GST at the larger picture,” says
TEA president Raja Shanmugham. O