In­dian tex­tile and ap­parel ex­port in­dus­try pleased with GST re­lief

Apparel Online - - India Canvas -

The Goods and Ser­vices Tax (GST) Coun­cil has an­nounced tax re­duc­tion for the tex­tile and ap­parel ex­porters of In­dia at its 22nd meet­ing. The Coun­cil has re­duced the GST rate on man-made yarns like polyester, vis­cose and other blended yarns to 12% from the cur­rent 18%. Arun Jait­ley, Fi­nance Min­is­ter, chaired the meet­ing. Zari job work will now at­tract only 5% GST against the pre­vi­ously fixed 12%. This will ben­e­fit tex­tile hubs like Su­rat. Ad­di­tion­ally, it was an­nounced that the ap­parel ex­porters will start re­ceiv­ing GST re­fund (for July) from Oc­to­ber 10 on­wards while re­fund process for the Au­gust month will be­gin from Oc­to­ber 18.

The Coun­cil will cre­ate an e-Wal­let for the ex­porters by 1st April next year. This will al­low them to pay IGST/GST by us­ing the e-Wal­let tech­nol­ogy. The Govern­ment will also de­posit a nom­i­nal amount as ‘ad­vance re­fund’ in the e-Wal­let. Ac­tual re­funds will be set­tled against the ad­vance re­fund made. The fa­cil­ity will ben­e­fit the ex­porters by ac­cel­er­at­ing the GST re­fund process.

The FM also an­nounced that 0.1% GST will be charged from mer­chant ex­porters through schemes like ex­ist­ing ad­vance au­tho­riza­tion, EPCG, EoU till e-Wal­let comes into ef­fect. Var­i­ous tex­tile and ap­parel trade as­so­ci­a­tions of In­dia have hailed the Govern­ment’s move of slash­ing the

GST rates.

Ashok Ra­jani, Chair­man, AEPC said, “These measures will give im­me­di­ate re­lief to the ap­parel ex­ports sec­tor. How­ever, since the duty struc­ture re­mains in­verted with fab­ric at 5% GST, we are hope­ful that the em­bed­ded taxes aris­ing out of this in­verted struc­ture will be re­funded to ex­porters through ap­pro­pri­ate mech­a­nisms."

P Nataraj, Chair­man, The South­ern In­dia Mills As­so­ci­a­tion (SIMA) com­mented, “Re­duced rate of GST on MMF would greatly ben­e­fit the spin­ning and power loom sec­tor, im­prove global com­pet­i­tive­ness and cloth the poor masses of the na­tion at an af­ford­able cost.” He was hope­ful that the GST Coun­cil would soon con­sider re­fund of the ac­cu­mu­lated in­put tax credit at fab­ric stage espe­cially the pro­cessed fab­rics and also man­date the duty draw­back com­mit­tee to rec­om­mend ap­pro­pri­ate duty draw­back rates and RoSL rates to sus­tain the ex­port per­for­mance.

Ra­jeev Bansal, Chap­ter Chair­man, In­dian In­dus­tries As­so­ci­a­tion (IIA) and Sec­re­tary, Noida Ap­parel Ex­port Clus­ter said, “Re­verse Charge Mech­a­nism (RCM) has been de­ferred till 31 March 2018. I agree that it is very much re­quired to keep the GST chain alive and it is a good step for the time be­ing. How­ever, the re­lease of the re­fund will ease the liq­uid­ity amongst the ex­porters.” An­other apex trade body, In­dian Tex­preneurs Federation (ITF) also wel­comed the de­ci­sion. Prabhu Dhamod­ha­ran, Con­venor, ITF stated,

“We are thank­ful to the Govern­ment for this. The tex­tile man­u­fac­tur­ing sec­tor will get enough re­lief with this re­duc­tion. It is a his­toric de­ci­sion. We have got what we re­quested.”

San­jay K. Jain, Chair­man, CITI stated that 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. “Ex­tend­ing the tax ex­emp­tion for 100% EOU units, Ad­vance Li­cens­ing Scheme and EPCG Scheme and al­low­ing the mer­chant ex­porters to pur­chase with 0.1% tax pay­ment up to 31st March 2018 are a few an­nounce­ments that will ben­e­fit the tex­tile in­dus­try,” said San­jay.

Ex­tend­ing the tax ex­emp­tion for 100% EOU units, Ad­vance Li­cens­ing Scheme and EPCG Scheme and al­low­ing the mer­chant ex­porters to pur­chase with 0.1% tax pay­ment upto 31st March 2018, are a few an­nounce­ments that will ben­e­fit the tex­tile in­dus­try.

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