For the past three years, the export growth of the Textiles and Clothing industry, the second largest employment provider of the country after agriculture and providing jobs to over 105 million people has stagnated to a great extent.
While, countries such as Bangladesh, Vietnam have achieved significant growth in garment exports during the last three years while India export is stagnated at US $ 16 to 17 billion per year.
In a Press Release issued here today, Mr.P.Nataraj, Chairman, The Southern India Mills’ Association (SIMA) has appealed to the Ministry of Finance to have a re-look at the drawback rates applicable for textiles, refund all the blocked, embedded taxes, levies and accumulated input tax credit on fabric especially the processed fabric as the exports would suffer very serious impacts and dwindle down sharply.
In order to protect the jobs of several millions of people in the textile industry, he has urged the Government to extend the existing drawback benefits till the GST anomalies and problems are fully sorted out and also the realistic drawback rates refunding all blocked, embedded taxes and levies including accumulated input tax credit at fabric stage are fully taken into consideration.
He added that the service tax has been increased 15 to 18% and several services have been brought under tax net, under GST.
Mr. Nataraj has stated that the Central Government realizing the need for boosting textile exports and create jobs, announced a special package of Rs.6,006/- crores during September 2016 for garments and included made-ups recently giving enhanced duty drawback rate and also ROSL (Refund of State Levies). However, the present announcement of the government on duty drawback rates does not synchronize with the earlier government announcement of boosting exports and job creation.
In the present announcement, only the old drawback rates have been retained when Cenvat credit was availed without any change and also without getting into detailed calculation of blocked tax burden on each product.
The textile value chain has been under exempted route since 2004 and the drawback benefit and other export benefits were giving some competitive edge to the Indian textiles and clothing exporters with the competing Nations as India is yet to conclude any FTA with the major markets.
While, countries such as Bangladesh, Vietnam have achieved significant growth in garment exports during the last three years while India export is stagnated at US $ 16 to 17 billion per year.
In a Press Release issued here today, Mr.P.Nataraj, Chairman, The Southern India Mills’ Association (SIMA) has appealed to the Ministry of Finance to have a re-look at the drawback rates applicable for textiles, refund all the blocked, embedded taxes, levies and accumulated input tax credit on fabric especially the processed fabric as the exports would suffer very serious impacts and dwindle down sharply.
In order to protect the jobs of several millions of people in the textile industry, he has urged the Government to extend the existing drawback benefits till the GST anomalies and problems are fully sorted out and also the realistic drawback rates refunding all blocked, embedded taxes and levies including accumulated input tax credit at fabric stage are fully taken into consideration.
He added that the service tax has been increased 15 to 18% and several services have been brought under tax net, under GST.
Mr. Nataraj has stated that the Central Government realizing the need for boosting textile exports and create jobs, announced a special package of Rs.6,006/- crores during September 2016 for garments and included made-ups recently giving enhanced duty drawback rate and also ROSL (Refund of State Levies). However, the present announcement of the government on duty drawback rates does not synchronize with the earlier government announcement of boosting exports and job creation.
In the present announcement, only the old drawback rates have been retained when Cenvat credit was availed without any change and also without getting into detailed calculation of blocked tax burden on each product.
The textile value chain has been under exempted route since 2004 and the drawback benefit and other export benefits were giving some competitive edge to the Indian textiles and clothing exporters with the competing Nations as India is yet to conclude any FTA with the major markets.