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SRTEPC Chairman Seeks GST Reduction On Yarn From 18 Per Cent To 12 Per Cent

• By  Henry Dsouza
• June 10, 2017

The Synthetic and Rayon Textile Export Promotion Council (SRTEPC) has sought the reduction of GST on yarns from 18 per cent to 12 per cent and mechanism to refund accumulated input tax credit (ITC) on exports of manmade fibre (MMF) textiles.

SRTEPC Chairman Narain Aggarwal met the Commerce and Industry Minister, Government of India, gave feedback about GST and urged him to immediately reduce GST on yarns.

Aggarwal raised the issue regarding the adverse impact of GST on exports of manmade fibre textiles and the need for immediate action to arrest its decline, which would affect employment generation and foreign exchange earnings.

The SRTEPC stated that after implementation of GST, the tax rate on manmade yarns has been increased from 12 per cent to 18 per cent, which has made the cost of fabrics higher.

Under GST, duties on spun, textured, fully drawn, warp and knit yarns is 18 per cent and 5 per cent GST on fabrics, with no refund of input tax credit, has resulted in huge accumulation of unutilised credit with weavers.

Blocked non-rebated state input taxes and duties like transmission charges, electricity duty, cross subsidy on electricity bills, water cess, green tax, local body taxes, road taxes, labour cess, etc is about 5% of Freight on Board (FOB) value of the textile exports and which are not adjusted in drawback or Rebate of State Levies (ROSL) scheme to the yarn and fabric exporters, Aggarwal stated.

Textile Excellence