In­dia: Gov­ern­ment rules out GST rate re­vi­sion for tex­tile in­dus­try

Stitch World - - NEWS TRACK -

The In­dian Gov­ern­ment has ruled out any scope of re­lax­ation on Goods and Ser­vices Tax ( GST) for the tex­tile in­dus­try. Tex­tile traders have been con­tin­u­ously protest­ing against the im­po­si­tion of 5 per cent GST on tex­tile/fab­ric. How­ever, the Cen­tre seems un­fazed.

Fi­nance Min­is­ter Arun Jait­ley has re­port­edly said that if zero per cent GST on fabrics is con­sid­ered, then in­put tax credit chain for the domestic mar­ket will get af­fected and this will sub­se­quently make the im­ported prod­ucts cheaper in the In­dian mar­ket. Fur­ther­more, zero per cent tax will make the lo­cal mar­ket in­com­pe­tent as the in­flux of im­ported items will rise.

“Goods and Ser­vices Tax struc­ture for the tex­tile in­dus­try en­ables ease of clas­si­fi­ca­tion and de­ter­mi­na­tion of rate,” un­der­lined Jait­ley while ad­dress­ing a ses­sion in the Ra­jya Sabha.

The Min­is­ter also re­futed claims that the state tex­tile in­dus­try has never been ‘taxed’ be­fore. He cited an ex­am­ple from 2003- 04 when the en­tire tex­tile value chain was sub­jected to Cen­tral Ex­cise duty.

Un­der the new tax­a­tion sys­tem, yarns and fi­bres made from silk, wool, cot­ton or other veg­etable fi­bres have been placed un­der the bracket of 5 per cent GST. Gar­ments priced less than Rs. 1,000 will also come un­der the same (5 per cent) tax slab. How­ever, those (gar­ments) ex­ceed­ing Rs. 1,000 will at­tract 12 per cent tax. This irked the in­dus­try and led to na­tion­wide strikes.

How­ever, there is still a ray of hope for the tex­tile in­dus­try as the Gov­ern­ment will un­der­take

GST re­vi­sion after three months since its im­ple­men­ta­tion. Till then, there will be no re­lief to the sec­tor as the FM puts any re­duc­tion in GST rate on hold.

Fi­nance Min­is­ter Arun Jait­ley re­futes claims of state tex­tile never be­ing taxed be­fore

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