SME Times News Bureau | 11 Jul, 2019
Union Minister of Textiles Smriti Zubin
Irani on Wednesday said that GST imposed on the apparel sector amounts lesser
than taxes imposed under the pre GST regime.
GST rates for garments and
made up articles is 5% of sale value not exceeding Rs. 1000 per piece and 12%
for articles of sale value exceeding Rs. 1000 per piece. The GST rates are
lesser than the pre-GST incidence of taxes on these goods, Irani said in
written replies in the Rajya Sabha.
To reduce the cost of garment
industry, GST rate on manmade fibre yarns has been reduced from 18% to 12%.
Further, the refund of accumulated input tax credit on fabrics has also been
allowed to reduce cost of fabrics which is a major input for garments, she
added.
As per the data of Directorate
General of Commercial Intelligence and Statistics, export of textile and
apparel including handicrafts has increased by 0.2% from USD 40.1 billion in
2014-15 to USD 40.4 billion in 2018-19. Increase in imports is primarily due to
increase in imports of MMF and cotton textiles.
To increase competitiveness of textile industry,
Government announced a Special Package for garments and made-ups sectors. The
package offers Rebate of State Levies (RoSL), labour law reforms, additional
incentives under Amended Technology Upgradation Fund Scheme (ATUFS) and
relaxation of Section 80JJAA of Income Tax Act, she added.
Products such as fibre, yarn and fabric in the
textile value chain are being strengthened and made competitive through various
schemes-Powertex for fabric segment, ATUFS for all segments except spinning and
Scheme for Integrated Textile Parks (SITP) for all segments. Assistance is also
provided to exporters under Market Access Initiative (MAI) Scheme, the minister
said.
Government has enhanced interest equalization
rate for pre and post shipment credit for exports done by MSMEs of textile
sector from 3% to 5% from2.11.2018. Benefits of Interest Equalization Scheme
has been extended to merchant exporters from 2.01.2019 which was earlier
limited to only manufacturer exporters, she added.
To contain increase in imports of textile and
apparel, Government increased Basic Customs Duty on 504 lines comprising
apparel, carpets, fabric, madeups and others from 10% to 20%, Irani said.