GST Haunting Textile MSMEs, Small Exporters: AEPC Tells Parliamentary Commitee

Trade & Policy

GST Haunting Textile MSMEs, Small Exporters: AEPC Tells Parliamentary Commitee

An Apparel Export Promotion Council (AEPC) led delegation has informed the Parliamentary Standing Committee on the impact of GST on apparel export about difficulties being faced by Micro, Small and Medium Enterprises (MSMEs) and small exporters after the rollout of GST, according to an APEC release.

APEC Chairman Ashok Rajani said that the positive impact of GST is yet to be felt by the garment industry and input costs have not come down. The exporters’ body lamented that the sector, especially MSMEs, do not have the required resources for GST compliance.

He said that small and medium exporters cannot cope due to substantial increase of working capital and higher transaction cost. Also, MSME have to recruit services of qualified chartered accountants to be able to manage GST payments and refunds which is adding to the overall burden on the sector.

AEPC told the Parliamentary Standing Committee said that exports are likely to fall drastically because of this situation.

An APEC presentation also drew the attention of the panel to the issue of extension of exemption of IGST on import under EPCG or advance authorisation from March 31, 2018 to December 2018 to provide a longer window for investment decisions, enhancement of Merchandise Exports from India Scheme (MEIS) to 5% for reimbursing increase in cost of working capital and higher transaction cost.

The sector is already facing a tough time due to competition from rival countries and complications at home are harming the industry further, the APEC chairman said.