ra­jan Mishra, ardee KOMFAB pvt. LTD, Delhi

Perfect Sourcing - - Burning Issue -

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.

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