Man-made fibre and synthetic yarn would be levied 18 per cent tax under GST regime while the fabric only 5 per cent. Industry experts feel that keeping the rates of key inputs at a higher level will negatively the competitiveness of small and medium synthetic textile manufacturers. Stating the same as concern of inverted duty structure problem, Confederation of Indian Textile Industry (CITI) chairman J Thulasidharan, recently said that the textile sector is suffering from various disadvantages like high energy costs and infrastructure bottlenecks. This announcement would further dent the growth of the industry.
According to him, India is already suffering a huge competitive disadvantage in the global textile market as the MMF based textile products are attracting higher rates of import duty. Keeping the GST rates at this rate will undoubtedly cripple hundreds of small and medium synthetic textile manufacturers. He further emphasizes and asked the government to reconsider the rates of MMF products and bring it at 12 per cent. He also pointed out that the high rates announced for MMF fabric and yarn, dyeing and printing units, embroidery items at 18 per cent can lead to an increase in input costs and can adversely affect the entire textile value chain.
Giving a different perspective, Synthetic and Rayon Textile Export Promotion Council (SRTEPC) chairman Narain Aggarwal that keeping the GST of 5 per cent on fabrics is quite favourable for the industry. The GST of 18 per cent on synthetic fibre is again not a bad news, because the tax rate is same as it was earlier. Meanwhile, The Southern India Mills’ Association (SIMA) and CITI have appealed to the government to exempt the textile jobs from service tax as it would benefit the predominantly decentralised and MSME nature of the industry, especially the powerloom, knitting, processing and garmenting sectors.