Home / Knowledge / News / Textiles / Tiruppur-based TEA sends pre-budget proposals to Indian FM
Tiruppur-based TEA sends pre-budget proposals to Indian FM
Dec '17
Tiruppur-based TEA sends pre-budget proposals to Indian FM
Permanent deletion of reverse charge mechanism, sufficient fund allocation for government schemes, increasing Investment limit for micro, small and medium enterprises (MSMEs), establishing a knitwear board and amending labour laws are some of the pre-budget suggestions submitted by the Tiruppur Exporters Association (TEA) to the Indian finance minister.

As the provision of reverse charge mechanism (RCM) with respect of purchases from unregistered dealers is causing huge compliance burden, especially to MSME clusters like Tiruppur where there are thousands of unregistered micro and small manufacturers and traders, TEA has suggested permanent removal of RCM from the Goods and Services Tax (GST) Act, according to a press release from the association.

RCM implies that the GST is to be paid and deposited to the government by the recipient of goods and services and not by the supplier.

As the garment export sector is starved of working capital as refunds due are getting significantly delayed due to issues in GST implementation, TEA recommended allocating sufficient funds to all related governmental schemes to clear all pending dues at the earliest and providing the sector with necessary cash to tide over the working capital crisis.

Fund allocation to the government’s Market Access Initiative (MAI) scheme may be doubled so that India gets more business opportunities, the TEA memorandum said.

The interest equalization for apparel exporters may be enhanced to 5 per cent and the duty drawback rates may be enhanced to 4 percent from the current 2 per cent to cover blocked credits, such as central GST on fuel, compensation cess on coal, electricity duty and stamp duty, so that the industry can fight competition from Bangladesh, Vietnam, Cambodia and Ethiopia, which enjoy duty-free status with the European Union, according to the association.

TEA wants the investment limit for plant and machinery to be raised from the existing ceiling of Rs 25 lakhs to Rs 50 lakhs for micro enterprises, Rs 5 crore to Rs 10 crore for small enterprises and Rs 10 crore to Rs 30 crore for medium enterprises.

A Knitwear Board stationed at Tiruppur is also needed to focus on an industry that is generating over Rs. 35000 crore of business from the Tiruppur cluster alone.

Other recommendations of the association include amendments in the labour law regarding provident fund and pension, a central scheme for job creation in the sector, imposing 5 per cent GST on effluent treatment activity of apparel units instead of 18 per cent and exempting imports of accessories like zips and tags using the ‘export promotion certificate’ from the purview of international GST. (DS)

Fibre2Fashion News Desk – India

Must ReadView All

'Sportswear is much more mainstream than earlier'

Fashion | On 20th Jul 2018

'Sportswear is much more mainstream than earlier'

The business of sportswear has evolved at a fast pace over the years. ...

Courtesy: YKK

Textiles | On 20th Jul 2018

Japanese firm YKK explores opening office in Uzbekistan

Japanese company YKK recently discussed with the Uztuqimachiliksanoat ...

HFPA alerts member firms on latest US tariff announcement

Textiles | On 20th Jul 2018

HFPA alerts member firms on latest US tariff announcement

The US Home Fashion Products Association (HFPA) has alerted its...

Interviews View All

Anavila Misra
Anavila Collection

Fashion shows are also encouraging and highlighting sustainable fashion

Top executives
Textile industry

GST has levelled the playing field to an extent

Yashiki Gumber
Sahiba Fabrics

Fabric does not restrict us from fashion trends

John Kelley

Textile Events is one of the largest textile fair in the United Kingdom,...

Hardik Sanghvi

Idealin Fogging Systems has been engaged in designing and manufacturing...

Shivani Swamy

The Livinguard Technology is owned by Green Impact Holding AG based in...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Marcel Alberts

Coating at a fibre level is a practice not usually seen in the...

Robert Brunner

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Samar Firdos
Arvind Ltd

<b>Samar Firdos</b>, Chief Manager (Design) at Lifestyle Apparel Denim...

Priya Somaiya
Usha Social Services

The Usha Silai label from Usha International is all set for a retail...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


Leave your Comments

July 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category

Related Categories:

Advanced Search