rajan Mishra, ardee KOMFAB pvt. LTD, Delhi
Ifirmly believe that the reasons for downfall of the industry is GST which is now 12% on blended yarn like viscose, polyester, wool, nylon and other man made yarns. Besides, the GST on fabrics is now 5%. Now the crux is that yarn is the main component / raw material of fabric manufacturing which is approximately 90% of the fabric value. We are buying yarn at 12 % GST and selling fabric at 5 % GST, the cost of manufacturing has gone up by 7 % due to this and hence we are out of competition as compared to our neighbouring countries who, have big cost advantage. Another challenge is that the loans have very high rate of interest which any manufacturer needs for personal, business or for buying machinery. Today, people do not have capital and when they seek bank loan the high rate of interest becomes a major hurdle. I think the solution to this is reduced interest on collateral base loan to 0 %. This way everyone will start doing business in ethical manner and the government will earn from GST and income tax. In my opinion, the Government should start giving incentives on income rather than charging income tax. Everyone will start doing business through genuine mode and all transactions will be through either bank or digital payments. Govt will start earning through gst or other indirect taxes and this will increase GDP many times.