Textile Sector Archives | XaTTaX GST Blog

Textile bizmen relieved after GST Council stays tax hike

March 18, 2020 admin Comments 0 Comment

City businessmen into textiles and garments have heaved a sign of relief after the GST Council, in its meeting held on Saturday, did not hike the rate of 5% GST applicable on some fabrics and garments costing below Rs1,000. Earlier, there were hints from the central government that the 5% slab of GST would be abolished, and the minimum GST on fabrics and garments would be 12%.

Welcoming the decision, Knitwear Club finance secretary Harish Kairpal said, “We are thankful to the GST Council for not going ahead with the proposed hike in the rate of GST on certain fabrics and garments up to Rs1,000. Had the GST been hiked to 12%, it would have destroyed the textile and garment manufacturers, who are already struggling to cope with the current scenario, where there is a huge drop in demand, both locally and internationally. We also request the union government to bring out a package for our industry to face this recession, which is getting worse day by day.”

According to Atul Saggar, general secretary of Apparel Manufacturers Association of Ludhiana, “It’s nothing less than a big relief for us, as had the GST been hiked by 7%, it would have hiked our cost of production significantly, and we would have been forced to hike the rates of our products, and that too at a time where we are already short of orders.”

According to Sukhwinder Singh — another garment manufacturer, and member of the Ludhiana Business Forum, “The currently applicable GST of 5% on certain fabrics and garments costing up to Rs1,000 is already non- refundable, and when the same rate is into force for more than three years now, why did the government want to change it now. The stand taken by GST Council is really appreciable, as the hike of 7% GST would have definitely hit the garment industry hard, and our already low sales would have dropped further had the new rate of 12% GST been imposed on us.”

Source: Times-of-India

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GST effect: Textile sector in Telangana losing competitive edge

August 31, 2017 admin Comments 0 Comment

Textile sector : GST Effect

To ease the pains caused by Goods and Service Tax (GST) on small scale textile manufacturers, the Telangana state government earlier this month had brought out a textiles and apparel policy. The policy speaks of incentives and land allocation for a mega-textile park, however, the sector has responded with mixed reactions. Textile sector exporters have had to keep their selling prices high mainly due to stiff competition from China and Bangladesh and a strong rupee.

Following which export orders that were mostly fulfilled by small scale textile manufacturers started drying up. “Now with GST, garments sector has lost the competitive edge. We used to have excise duty exemption but not anymore,” said Ramadevi Kannegati, president, Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP). “In garmenting, corporates used to give small textile traders bulk order mainly due to excise exemption but now that we are under GST that attractive factor is gone. Also, tax has to be passed on to consumer making product costlier, now we are not able to compete as small players and big players compete together.

There is a fear that we will lose orders,” she added. With regard to states new textile policy, Kannegati said, “The state will bear the cost of providing incentives but for how long? The state is then deprived of revenue. This is not an overall industrial policy, TS is at loss. The policy intervention should be to encourage handloom and it should be a central policy.

But we are grateful the state has come up with this.” “All states are giving incentives but further incentives with good infrastructure is needed. Land allotment for the mega textile park is just on paper,” said A Prakash, president, Telangana State Textile Association. “Instead of textile, the government should focus on the technical textile industry where there is a larger scope in India,” he added.

Most rural traders lack GST expertise

According to Prakash, most rural traders lack expertise in GST and are struggling to file returns. “The technical training provided by the state government was just theory based. Hands-on practical training on computers needs to be given to traders. Many were unprepared to shift to GST as the sector was included in GST much later,” Prakash added.

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Source:  The New Indian Express

Textile ministry examining service tax issue, industry ‘positive’ about GST rate: Official

June 8, 2017 admin Comments 0 Comment

Textile Industry

The GST rate of five per cent on the textile sector has seen a lot of “positive response” from the industry, a top Central government official said today.

Whether cotton, jute or silk, “we said that the textile sector should have a five per cent GST,” A Madhukumar Reddy, Joint Secretary, Ministry of Textiles, told reporters here.

The same rate applied to the sale of garments with a value of less than Rs. 1,000, he added.

“In terms of items of mass consumption, the GST rate has been limited to 5 per cent and because of this the entire industry has welcomed it,” he said.

Briefing reporters here about Textiles India 2017, an international exhibition scheduled later this month, Reddy said the rate was 18 per cent for Man Made Fibre (MMF) and even in this segment “there has been no increase”.

“On the whole, in the broad sense, there has been a lot of positive response from the industry,” on the GST tax rate, he added.

K Selvaraju, secretary-general, South India Mills Association, also welcomed the GST rate for the textile sector, calling it an “excellent tax structure.”

“It would definitely strengthen our industry since we are predominantly cotton-based. Sustainability and competitiveness will sustain,” he said.

The net increase on the common man will be “very negligible,” he added.

He said a “lot of disparities” have been sorted out by the government ahead of the GST rollout.

“In my opinion, for the first time we are having an excellent tax structure,” he added.

Earlier, briefing about the Textiles India 2017 event, Reddy said it will be held from June 30-July 2 in Gandhi Nagar, Gujarat, with Prime Minister Narendra Modi slated to inaugurate the international exhibition.

The exhibition will showcase India’s strength in the entire textile and apparel value chain from fibre to fashion, he said.

Various countries including China, the US, Bangladesh and Vietnam among others would participate in the event, he said adding, about 2,500 international and 15,000 domestic buyers were likely to attend the three-day expo.

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