Welcoming the government's move to revise the GST rate, Narain Aggarwal, chairman, SRTEPC said that reduction in GST rate on man-made fibres to 12 per cent, there will be a growth in the entire textile value chain. "The manmade fibres and yarns were slotted under 18 per cent GST rate while the fabrics were slotted under 5 per cent GST slab with a condition of no refund of Input Tax Credit (ITC) at fabric stage. This had created a huge accumulation of nonrefundable ITC with the weavers and blockage of working capital. Now, with reduction of GST to 12 per cent, this problem will be subsided to a larger extent and will be more manageable," Aggarwal added.
"The reduction in GST would benefit both the spinning and power loom sectors who are the manufacturers and suppliers of yarns to the textile industry. As soon as the benefit is passed on to the entire downward value chain of the textile industry, our textile items in the global market will be more competitive. It will also help in ensuring that the country’s poor are clothed at an affordable price," Anil Rajvanshi, convenor (EP), SRTEPC, said in a statement.
"Another important and effective decision taken by the GST Council is approval of the two different ways for immediate relief and for providing long term support to exporters. Immediate relief will be given by extending the Advance Authorisation (AA) / Export Promotion Capital Goods (EPCG) / 100 per cent EOU schemes to sourcing inputs etc. from abroad as well as domestic suppliers. Holders of AA / EPCG and EOUs do not have to pay IGST, cess etc. on imports. Domestic supplies to holders of AA / EPCG and EOUs would be treated as deemed exports and refund of tax paid on such supplies given to the supplier. This will give immediate relief to the exporters on capital requirements for procuring the inputs of the exportable products (textiles)," added Rajvanshi.
The association welcomed the government's decision to allow small and medium enterprises (SMEs) with an annual turnover up to Rs 1.5 crore to file quarterly income returns and pay tax, instead of the current provision of monthly filings and exempting exporters from furnishing bond and bank guarantee when they clear goods for export. (RR)
Fibre2Fashion News Desk – India
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