The South India Garment Association (SIGA) in a letter to the prime minister of India regarding the new tax regime has asked to reduce GST rate in order to boost employment which will take country’s economy to the next level. With high hopes and positive note Trade & Industry welcomed the Goods & Service Tax the biggest tax reform with expectation that
• The retail prices will be reduced because multiplex point taxation will be removed hence retail prices of most of the commodities will come down,
• It was expected that paper work will be reduced.
• ‘One Tax One Nation’ so there will be hassle free movement of goods across the country. Positive tax system as well as trade & industry friendly environment will boost the compliance in natural way.
• Hence manufacturing sector will boom that will directly increase employment.
• There will be bare minimum direct interaction with department hence harassment will be reduced.
• Trading community as well as end buyers are experiencing tough time with GST law, paper work as well as high rate of GST rate slabs. For better compliance traders must be given opportunity to do trade activities in easier & simple way.
GST LAW, RULES & TAX SLABS are tough & cumbersome doesn’t support fare environment to trade or to end buyer.
The general perception is that GST is introduced without being taken care of an entrepreneur’s difficulties. Rules & systems are exhausting and cumbersome, difficult to maintain in day to day affairs, which has brought down market sentiments and also panic in manufacturers, traders as well as end buyer/consumer. GST rules/law is too complicated at every stage; it is very difficult & cumbersome maintaining and submitting records three times every month to the department on-line. It is to be considered that most of the micro, small & medium traders are not having internet know-how.
Under GST rules/law geographical, socio, cultural environment, mind set of common countryman & most importantly nature of product must be considered. GST law has been made too tough, cumbersome & discouraging for traders while taking into day to day trade practice. Principally entrepreneur must be left to do hassle-free trade & contribute to the exchequer. Cumbersome & tough laws are preventing flawless trading activities & at the other end, entrepreneur is not been given time to concentrate on trading activities.
We represent apparel/textile industry, we suggest the following to improve sector’s performance that
1. One tax slab 5 per cent must be fixed irrespective of transaction value either within rupees thousand or plus thousand, discrimination in transaction value impacting negatively.
2. Return filing must be one strictly every month as it was under VAT rule. Single submission of GSTR-3 form provides complete information of input & output tax credits.
3. Penalties provisions are very harsh and huge opportunities are rendered to officials, leading to inspector raj while trader will not be able to concentrate on trade activities that will lead to negative growth of trade.
4. E way bill in present form as already introduced in Karnataka is like restricting the trading activities. In present form information asked in e way bill are HSN code, lorry/transport vehicle number and L.R. number in advance is like restricting the movement of goods while there must be hassles free movement.
GST ON FABRIC: It is very harsh to levy GST on fabric. It is required to bring textile/fabric trade & industry under GST NET but at zero percent. Textile manufacturing must have brought under GST net but at zero percent GST, Textile industry has to maintain accounts to be assessable at zero percent tax.
We suggest zero percent tax on textile/fabric because textile industry generates highest jobs to women & poorest of the poor community which deprives them out from indulgence in unwanted & illegal activities while provides them daily earnings.
RCM -REVERSE CREDIT MACHANISM: we appreciate the suspension of RCM rules which is a cumbersome & complicated law. RCM has been introduced with theory of maintaining “quality expenses”. Theory of quality expenses created negative mindset to the trade & industry.
It is required to amend the GST law and make documentation and system trade & industry friendly & growth oriented to boost the retail sector and enhance buying power of a common man. Trade & industry has very hopes with Sri Modi government for all round growth in trading & manufacturing sector.
We further request that
1. Kindly consider & remove 12 per cent GST slab from apparels (presently 12 per cent at transaction value 1000+) Garment industry must be brought under 5 per cent GST slab.
2. Complication of forms must be reduced by removing GSTR-1 & GSTR-2.
Only one form GSTR-3 submission is enough to declare details of GST collected & paid & the final Monthly or quarterly return must be made for easing to do business for better exchequer.
3. Textile/Fabric must be placed under zero percent slab to increase all round manufacturing activities to generate more employment
4. Consider to scrap e way bill as required information are being submitted in GSTR-3, which is enough to track transactions. Free and hassle free movement of goods will prove futile to ignite trading activities.
Biggest retail season Diwali was down by 30-50 per cent now textile industry is looking forward towards wedding season which is yet not showing sign of start. It is important for manufacturing unit to continue using maximum production capacity, at present scenario decline in production capacity or using under production capacity may lead to reducing jobs or creating unemployment to weaker section.
Trade & industry have high hopes that goods & service tax will be proved successful biggest tax reform which will take our country’s economy at next level.
– Apparel and Textile News, Apparel Talk, Indian Apparel
