Textile industry seek for a uniform duty of 5pc under GST

The government has already announced special packages for different segments of the textile industry in June last year and for made ups (an article manufactured and/or stitched from any type of cloth, other than a garment) in December. But now the focus is on GST which is a new tax regime and it will definitely impact the Indian textile industry.

The industry was expecting a special package for powerloom sector to be announced shortly but they do not expect any major announcement in the budget, a spokesperson for the industry said.

The textile industry is looking for a uniform duty of 5% under the Goods and Services Tax(GST), which is expected to be rolled out from July this year.

According to M. Senthil Kumar, Chairman, Southern India Mills’ Association, till the GST is rolled out, they hope there will be no changes in the optional CENVAT that is implemented now.

About 60 percent the Indian textile industry is cotton-based and 80 percent of textile and clothing exports are also cotton-based.
According to industry representatives, the textile and clothing sector want the lowest duty slab of 5 percent without exemptions for any segment of the value chain.

Supply chain of Textile Industry is loaded with input and output across state boundaries to reach the ultimate consumer. Octroi and Entry Tax are the bottlenecks, credit of which is not allowable, thus form the part of the cost. Subsume of octroi, entry tax, entertainment tax, luxury tax, etc. into GST likely to remove the cascading effect at the distribution stage.