It’s more than 20 days since the implementation of GST in India. The Government is doing its best to create awareness about all the aspects of GST. Most from the apparels and textiles industry had earlier stated that things will become clearer with its im
Prabhu Dhamodharan, Convenor, Indian Texpreneurs Federation (ITF), Coimbatore
I can say that the movement started off well. Being in the lowest slab, cotton textiles is quickly coming back to normal, and we can see brisk sale in many products at yarns and fabrics stage. As festival season is coming, we are expecting good sales momentum in the coming days. As far as MMF products are concerned, polyester cotton yarns and viscose yarns sales have started but pain is there in the prices due to higher GST rates and also because of some gap in input credit value at weaving stage.
The value chain is waiting for the date 5th August when GST Council meeting will take place and we are expecting a small change in rates for MMF yarns, from 18 to 12 per cent. We (our member mills) are very clear now on the GST part and the billing is going smooth, creating a system for all inputs credit without any wastage. As far as less logistic time is concerned, we can’t say strongly on this as there is no cotton season as of now. So, bulk transportation is not happening in our members’ mills.
Lalit Thukral, President, Noida Apparel Export Cluster (NAEC), Noida
This is a transition period and even the next two months will be the same. Though exporters will get back whatever taxes they have paid, we are still facing some problems. Communication gap is there as we heard that shipments are being cleared at Delhi airport with Letter of Undertaking (LUT) but not at Dadri (Container Depot). We are running from pillar-to-post to get clarity on such things.
Despite these challenges, we are positive about GST as all these things will become clearer after the transit period. But the major concern is 18 per cent rate on jobworkers. Many small and medium level exporters told me that they are facing problems due to this. Some small but important jobworkers are planning to leave this business rather than going for GST registration and paying 18 per cent GST. So, this is a major concern now. I would urge the Government to support and clear things for at least the next 3 months rather than cross checking and creating fear factor. There are many exporters who are not much friendly with the rules and regulations, or not having enough support staff to manage such things. Hence, Government’s supportive nature is required to help them overcome the difficulties.
Sudhir Sekhri, Chairman & Managing Director, Trend Setters International, Delhi
It is very early to say something concrete on GST benefits so far. Things will be really clear by 30th September, 2017 or so, when new system/rates regarding ROSL and duty drawback will be announced and we will compare the things. But currently, the issue is to manage the working capital as for everything, we are paying GST and until it is not received back, money will remain blocked.
For most of the medium-level exporters, working capital management was already a big challenge. Therefore, there are some grey areas in GST or allied policies and even financial experts are not clear about them. These doubts will be cleared slowly in the coming months as it happens with every other big initiative. At an operational level, there are no issues. We don’t see less transportation time as a major benefit as due to systematic planning, we don’t face much issues in this area.
In the last 20 days, Surat was on strike which created some problems for fabric availability but now it is coming back to normalcy.
Suman Khaneja, Director, Saloma Fashion Hub, Delhi
I would like to comment on it from two different perspectives. As a garment exporter, I must say that at present, there is some problem on fabric deliveries due to the recent strike in Surat. Though news is coming that
Surat has started working, it will take some time to get back to what it was earlier. Secondly, polyester fabrics are going to be costlier now, so I don’t have any clue about how to answer the buyers on this. So far, we have not experienced this problem as there are no new orders but very soon, we have to justify. Even, GST is being publicized as ‘One nation-one tax’, then why SGST and CGST are being charged? Is it not that we are paying two taxes?
My second perspective would be from the angle of a common citizen. Why is there GST on things which are for use by the physically handicapped? There