It is well known that Chinese made synthetic cloth is cheaper than its Indian counterparts, essentially due to the massive scale of production and government incentives. A higher taxation rate will cripple Indian industry further by triggering a price rise which will ensure more market penetration for Chinese cloth in India. So, while yarn can be kept at 12 per cent, it is imperative that a lower tax rate of 5 per cent should apply on cotton and synthetic garments, said CAIT in a press release.
With a view to facilitate smooth transition of trade and commerce from current VAT regime to GST tax regime, CAIT has suggested that a period of nine months beginning July 1,2017 (the likely date of GST implementation) can be declared as a 'trial period' and no penal action is taken against any trader for procedural lapses except wilful tax offenders.
The association has also suggested that first three years of GST implementation in India can be declared as the 'Transition period' and instead of penalising, due support is given to trade and industry to cope up with the new taxation system.
In order to ensure smooth implementation of GST across the country and advancing the principle of mutual trust and confidence, a Special Working Group may be constituted both at the Centre and state levels comprising of senior tax officials and representative of trade and industry to regulate and monitor correct and timely implementation of GST in the country.
GST facilitation Centres can also be opened all over the country to disseminate correct information and awareness about GST. CAIT is willing to offer offices of trade associations across the country where such facilitation centres can be opened. (KD)
Fibre2Fashion News Desk – India
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