After the latest revision in the goods and services tax (GST) rates announced by the Country’s finance minister Arun Jaitley on Friday, the Indian textile industry is hopeful of growth with revision in the GST rates. The change in GST rate not only will strengthen the entire textile value chain and make textile industry globally more competitive but also boost electronic payment of taxes, various textile industry associations said.
Sanjay K Jain, chairman of Confederation of Indian Textile Industry (CITI) said, “By announcing reduction of GST rates for MMF yarns to 12 per cent, the GST Council has met a long pending demand of the textile industry. 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.”
P Nataraj, chairman of The Southern India Mills Association (SIMA) said, “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 government has looked into the matter of liquidity issues faced by the Indian exporters.
“We have requested for higher rate of duty drawback rate after including the embedded taxes like transportation of raw materials and input, usage of petro products, for generation of electricity etc., which were not taken into account earlier mainly to enhance the competitiveness and also to protect SME exporters. As the exporters have to commit the future orders only based on the availability of duty drawback and other measures, an immediate announcement of increase in duty drawback would be much helpful to restore the confidence of exporters and reinvigorate the growth trajectory,” Raja M Shanmugham, Tiruppur Exporters’ Association (TEA) president said.
With upcoming GST rates for cotton, MMF and blended sector, convenor of Indian Texpreneurs Federation (ITF), Prabhu Damodaran hopes a boost in volumes and said, “With growing domestic demand, Indian textile industry can expect improvement in utilisation levels in the short term and also more investments in weaving and processing sectors in the medium term. By this change, credit blockage will be very minimal to weaving sector, and cost difference will be absorbed throughout the value chain in a uniform manner without impacting the financials of any sector.”
Exemptions of export promotion schemes like advance authorisation scheme; EPCG from the payment of GST up to March 31, 2018 will lead to a spurt in investments, Ujwal Lahoti, chairman, The Cotton Textiles Export Promotion Council said.
On the other hand, the weaving community has welcomed the tax rate revision, along with the extension of the reverse charge mechanism (RCM) till March 2018 while, textile mills stated that the reduced rate of GST would not only benefit the textile sector but it will also boost the spinning and power loom sector further.
– Apparel and Textile News, Apparel Talk, Indian Apparel
