GST has not helped garment exports: Traders

Garment exporters have told Parliament’s standing committee on commerce that they are yet to see any benefit from the goods and services tax (GST), with no decrease in input costs.

A delegation of the Apparel Export Promotion Council (AEPC) also said shipments might dip in the globally competitive market. Bangladesh and Vietnam, for instance, have cost advantages on account of preferential trade agreements with major export markets and buyers are moving to these destinations for sourcing.

As a result, they have warned, they might be forced to shed jobs.

GST’s compliance requirements, they’ve complained, has strained their time and cost resources. “The overall effect on apparel exporters, especially small and medium ones (MSMEs), is burdensome and stressful due to substantial increase of working capital and higher transaction cost. MSMEs have to recruit the services of chartered accountants to manage GST payments and refunds,” said Ashok Rajani, chairman of AEPC.

The body wants extension of the Integrated GST exemption on import under the Export Promotion of Capital Goods scheme or the Advance Authorisation scheme from end-March 2018 to December 2018. Apparel production, they contend, has been hit and the margins of exporters have come under more pressure due to the lowering of drawback rates.