The Southern India Mills’ Association (SIMA) today said there were some ill-effects due to certain GST anomalies that need to be addressed on a war footing inorder to bring all the stakeholders of the textile industry under the ambit of GST. Talking to reporters here, SIMA Chairman Nataraj appreciated the strenuous efforts taken up by the Centre while implementing the GST, by classifying the entire cotton textile value chain and also all the textile job work under the lowest and seamless GST slab of 5 per cent.
The lowest rate has protected the livelihoods of over 40 million people involved in cotton farming and trading community, Nataraj said. Stating that for processed cotton fabrics, the accumulation of input tax credit (ITC) would range between 3 to 5 per cent of the sale value, he said the dyes and chemicals account over 30 percent of the processing charge that attract 18 per cent GST while the fabric or job work is levied with 5 per cent.Yet another genuine demand of the synthetic sector was the reduction of GST rate on Man Made Fibre (MMF) spun yarn including sewing thread filament yarns from 18 to 12 per cent, he said.
The power loom sector and independent weaving units that produced over 95 per cent of the woven fabric was burdened with 18 per cent on yarn while the vertically integrated units did not have such a problem as they need to pay 18 per cent GST for fibres and only 5 per cent GST on fabrics and the cost difference works out to five to seven percent, he pointed out.
Considering this, Nataraj appealed to the GST Council to sort out both the anomalies of refunding the accumulated ITC at any stage of manufacturing especially processed fabrics and also reduce the GST on MMF spun yarn including filament sewing threads from 18 per cent to 12 per cent. Appeciating the bold and proactive initiatives taken by Prime Minister Narendra Modi and Union Textile Minister Smriti Zubin Irani, Nataraj said demonetisation and GST (one tax–one nation) were the two revolutionary policies implemented by the NDA government within a year to create a healthy business environment, curb tax evasion and corruption, enhance global cost competitiveness, and facilitate ease of doing business.