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Fix 5% GST rate for textile goods: Textile bodies
Apr '17
Uniform levy of 5 per cent Goods and Services Tax (GST) on all textiles and clothing products should be considered to ensure smooth migration of the entire value chain to the new tax structure, said over 20 textile associations led by the Southern India Mills' Association (SIMA) in a joint memorandum submitted to Union textiles minister Smriti Irani.

The entire cotton textile value chain is currently enjoying the zero per cent Central Excise benefit under optional Cenvat from 2004. Under this scenario, a uniform levy of 5 per cent (lowest slab) GST on all textiles and clothing products would ensure smooth migration of entire textile value chain from the present tax structure to GST tax structure with full compliance, creating win-win strategy for all the stakeholders and would bring substantial revenue to the exchequer when compared to the existing revenue., said the associations in the joint memorandum.

The associations have requested that all the existing export benefits including AIR duty drawback rates, ROSL benefits, MEIS, IES, EPCG and other benefits announced under garment/ made-ups export package need to be continued for some time after the implementation of GST as the industry has just begun taking advantage of these schemes and grabbing global export opportunities. All the existing export benefits could be continued till its expiry period in the case of apparel and made-ups package and for two years for all other export benefits, as the industry has no level playing field in the international market due to delay in concluding FTAs with various potential markets.

The textile associations have also asked Irani to persuade the ministry of commerce & industry and Prime Minister’s Office to conclude FTAs with all the potential importing countries especially EU, Britain, China, US, Canada, etc., to enable India to compete with countries like Vietnam, Bangladesh, Pakistan etc.

Irani has also been urged to bring back the Technology Mission on Cotton in a revised format (TMC II) with four Mini Missions to take necessary action so that the proposed anti-dumping duty on polyester staple fibre is dropped. Another request is to expedite the announcement of processing package and also extend 25 per cent capital subsidy without cap on investments with effect from January 13, 2016 to make the investments that are in pipeline financially viable.

The associations led by SIMA have also asked to revise the NPA norms to sustain the smooth functioning of SMEs in the textile industry. They said that the hank yarn obligation could be reduced to 15 per cent immediately to facilitate ease of doing business and the Handloom Reservation Act should be revamped. (KD)

Fibre2Fashion News Desk – India

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