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Imposition of RGST draws negative reactions
05 Oct '10
2 min read
Producers and exporters of bed wear items have agitated against the applicability of the Reformed General Sales Tax (RGST) regime to textile industry, as according to them, the move would cause the already sick textile industry to shut down permanently.
Exporters apprehended that, the amount so collected by way of tax will be diverted towards governmental functioning and for flood relief, due to which a large chunk of sector's funds would get blocked with the Sales Tax Department, for years together.
The government has not yet been able to clear the tax refunds outstanding for previous years, for reason of non-availability of funds; exporters stated and thus, discounted the chances of government paying tax refunds for the current year, post implementation of the RGST since October 1.
A few manufacturers-cum-exporters, who proposed strongly agitating against this imposition of RGST, stated that the exporters should initiate industrial action to protest against the government's irrational decision, which would scale down their businesses over the next two to three months.
They further stated that, applying RGST to the entire textile chain would persuade dummy exporters to draw sizeable financial gains through fake invoicing, while adversely affecting the real exporters.
Tax experts have questioned the motives behind this move by asking that, if the government intends to refund the sum collected by way of tax to exporters, what is the meaning of collecting the same through imposition of RGST.
Exporters apprehended that, the amount so collected by way of tax will be diverted towards governmental functioning and for flood relief, due to which a large chunk of sector's funds would get blocked with the Sales Tax Department, for years together.
The government has not yet been able to clear the tax refunds outstanding for previous years, for reason of non-availability of funds; exporters stated and thus, discounted the chances of government paying tax refunds for the current year, post implementation of the RGST since October 1.
A few manufacturers-cum-exporters, who proposed strongly agitating against this imposition of RGST, stated that the exporters should initiate industrial action to protest against the government's irrational decision, which would scale down their businesses over the next two to three months.
They further stated that, applying RGST to the entire textile chain would persuade dummy exporters to draw sizeable financial gains through fake invoicing, while adversely affecting the real exporters.
Tax experts have questioned the motives behind this move by asking that, if the government intends to refund the sum collected by way of tax to exporters, what is the meaning of collecting the same through imposition of RGST.
Fibre2fashion News Desk - India
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