Business Standard

Sop slower than pre-GST ones: Textile sector

- T E NARASIMHAN Chennai, 26 November

Despite the central government enhancing the Merchandis­e Exports from India Scheme (MEIS) and Remission of State Levies (RoSL) for the textile sector, the latter is critical.

The country’s second largest job generator says the incentives are still less than the pre-goods and services tax (GST) era.

In a notificati­on on Saturday evening, the Centre said the post-GST rates of RoSL were up to a maximum of 1.7 per cent for cotton garments, 1.25 per cent for manmade fibre (MMF), silk and woollen garments and 1.48 per cent for apparel of blends. And, up to a maximum of 2.2 per cent for cotton madeups, 1.4 per cent for MMF and silk made-ups and 1.8 per cent for made-ups of blends. For sacks and bags of jute, the rate is 0.6 per cent. All these apply with effect from October 1.

Further, the directorat­egeneral of foreign trade enhanced the rates under MEIS from two to four per cent on readymade garment (RMG) and made-ups from November 2017 to June 2018. Allocation for the scheme is ~1,143 crore for 2017-18 and ~686 crore in 2018-19.

Textile exports had dropped due to competitio­n from countries having duty-free access in the European Union and other major markets. Since the transition­al provision of pre-GST drawback rates and RoSL benefits were extended only up to September, export of RMG had fallen by 40 per cent in October, top the lowest level in 42 months.

Ashok G Rajani, chairman, Apparel Export Promotion Council, says he’s disappoint­ed at the RoSL rates, as it was “far below our recommenda­tions and central taxes rebate was not considered at all. Trade is in a dire state”.

M Rajashanmu­gham, president, Tirupur Exporters Associatio­n, says there’s still a 2.7 per cent shortfall compared to incentives drawn before GST implementa­tion.

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