Address GST ambiguity in new policy: Gujarat textile units to ask Centre

FE Bureau
Suggestion for one-nation one-power tariff for the sector was also welcomed during the meeting.

In view of upcoming Textile Policy-2020, Gujarat-based textile industry has decided to make presentation before the Union ministry of textile to address the issue of different slabs of good and services tax (GST) on textile value chain.

Currently, different slabs are applicable on raw material, yarn and grey fabric, says Ketan Desai, president of South Gujarat Chamber of Commerce (SGCCI), adding that on raw material, GST is as high as 18%, GST on yarn is 12% and on fabric, it has been kept at 5%.

"Recently, we had a brainstorming session with captains of the textile industry in Gujarat at SGCCI. Nearly 15 different issues related to textile industry was on agenda including that of ambiguity in GST and problems being faced by the textile units in claiming refunds," said Desai.

Instead of filing returns and refund system, the GST authority should come out with one-time tax scheme to make the taxation simpler for the thousands of textile units not only in Gujarat but across the country, said Gaurang Bhagat, executive committee member of Gujarat Chamber of Commerce & Industry (GCCI).

Bhagat who is also president of Maskati Cloth Market Mahajan said that instead of subsidies, the government should work on providing electricity at lower rates to textile industry which is the second largest employer after agriculture in the country.

Textile industry also wants easy availability of loans from banks, non-tariff barrier on imported garments, increase in time limit for the textile machinery imported from China under the Export Promotion Capital Goods (EPCG) scheme and increase in capital subsidy. They are also demanding to extend EPCG scheme for textile machinery and inclusion of weaving machinery under Amended Technology Up-gradation Fund Scheme (ATUF). Suggestion for one-nation one-power tariff for the sector was also welcomed during the meeting.

Recently, SGCCI has also made a representation before Gujarat government to reduce stamp duty on mortgage deed at a time of availing loan from banking sector. The Surat-based textile industry has also demanded for Textile Processing Park in the vicinity of the city.