Textile industry wants to be placed in the lower slab of GST

At a meeting held with textile minister Smriti Irani in New Delhi, the Tirupur Exporters’ Association president Raja M Shanmugham said that because of its MSME dominant nature and the slender margins in which the textile industry was operating, the entire textile sector may be placed in the lowest slab of the GST so that industry can absorb the levy without any significant impact on the business.

TEA apart from keeping the industry under lowest slab of GST, has placed a number of measures, including rebate on state levies, labour law reforms and setting up of knitwear board, among other things.

The TEA president in his memo to the minister, said that there is a long pending problem whereby job workers are being denied the issue of EPCG licences for capital goods imports. Despite repeated representations and even after the issue of clarificatory circular way back in September 2016, this issue is still unresolved. There is an urgent need to resolve this issue so as to reinstate climate of investment in micro and small industries that has shelved investment plans for more than 18 months now.

The benefits announced in the special package in June 2016 including rebate on state levies, EPF benefits for new employment are yet to be passed on to the exporters.

Optional ESI/EPF contribution for employees below a certain threshold minimum wages as indicated in Para 61 and 62 of Budget Speech of 2015 that is yet to be implemented through an amendment in PF and ESI Acts may be expeditiously given effect, he pointed out in his memo.

He further said that as a permanent solution to the problem of lack of interface between government and the industry, a focused and dedicated agency similar to ‘Silk Board’ or ‘Coir Board’ to be formed specifically for the knitwear sector which can serve as a catalyst for rapid growth of this industry segment.

According to him, successful textile clusters may be empowered with adequate industry infrastructure facilities such as ‘World class design studio’, ‘research and development centre’ and ‘incubation centre for technical textiles’ so as to facilitate rapid growth of not only the existing textile verticals but also enable them foray into niche segments creating quantum growth opportunities to the industry.