News >> Textile industry welcomes revision of GST rates

Textile industry welcomes revision of GST rates

Exempting export promotion schemes such as Advance Authorisation Scheme and EPCG from payment of GST till March 31 next year will lead to spurt in investments in the textile sector, said Ujwal R. Lahoti, chairman of Cotton Textiles Export Promotion Council.

He has said in a press release that 40 % of India’s textile exports are by merchant exporters. By providing the facility that they need to pay a nominal amount of 0.1 % as GST while claiming goods from manufacturers for exports will ensure that there is no cash flow problem.

According to Sanjay K. Jain, chairman of the Confederation of Indian Textile Industry, processing of refund claims for July exports by October 10 and for August exports by October 18 and decision to create e-wallet from next April will improve the cash flow for exporters. This will resolve the problem of blocking of working capital for exporters.

He was hopeful that the GST council will soon consider refund of the accumulated input tax credit at fabric stage, especially for processed fabric.

Chairman of Southern India Mills’ Association P. Nataraj has said in a press release that the industry had been appealing to the GST council to reduce GST rate on man-made yarn to 12 % from 18 %. This has been addressed by the council by reducing the rate to 12 % for MMF filament yarn, MMF spun yarn and filament sewing thread. The GST council should mandate the duty drawback committee to recommend appropriate duty drawback rates and Rebate of State Levies rates to sustain exports, he said.

Prabhu Dhamodharan, convenor of Indian Texpreneurs’ Federation, said that by reducing the GST rate for MMF and blended yarn to 12 %, the credit blockage for weaving sector will be minimal. Export of garments made of manmade fibre and blends is growing rapidly. With this favourable duty structure, more players will be motivated to enter it and cost competitiveness of Indian products will improve.

According to the president of the Indian Chamber of Commerce and Industry, Coimbatore, Vanitha Mohan, the option of quarterly filing of returns and payment of taxes by small businesses, rate cut on 27 items, and rationalisation of job work rates will bring to small businesses. However, the Government should announce more concessions for specific sectors in the MSME area.

(Source: The Hindu, October 10, 2017)