The Silk Association of India fears that the implementation of GST will have an impact on exports of silk fabrics and garments. It opined that since exports will be treated as 'zero rated' supply, hence there will be refund of input tax credit and since the refund will require filing 37 returns, it will be a cumbersome process for MSME's.
“The whole refund process will lead to blockage of funds and impact working capital flows. Unless necessary exemptions are introduced, exports would suffer,” Rajendra Kumar Kapoor, president of the Silk Association of India was quoted as saying by a leading daily.The Silk Association of India fears that the implementation of GST will have an impact on exports of silk fabrics and garments. It opined that since exports will be treated as 'zero rated' supply, hence there will be refund of input tax credit and since the refund will require filing 37 returns, it will be a cumbersome process for MSME's.#
According to Kapoor, considering the numerous and small transactions that take place in the sector, it will not be possible to claim refund of GST by the job workers and small exporters.
Kapoor suggested that an appropriate mechanism for neutralising the GST paid on the accessories be introduced as these MSME's and job workers buy accessories like specific threads and miscellaneous items.
He also raised apprehensions of job losses as if the GST law is enacted as proposed, then many silk manufacturers and exporters in the MSME sector will close down. (AR)
Fibre2Fashion News Desk – India
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