Textile industry ready to welcome GST:An article published in The Economic Times in June 2017 reported the views and response of theofficials and other people working with the textile industry. A top Central government official saidthat a GST rate of 5% on the textile sector saw a lot of “positive response” from the industry.A Madhukumar Reddy, Joint Secretary, Ministry of Textiles believes that whether it’s cotton, juteor silk, the textile sector should have a 5% GST.
The same rate would apply to the sale of garmentswith a value of less than Rs. 1,000, he added. “In terms of items of mass consumption, the GSTrate has been limited to 5 per cent and because of this the entire industry has welcomed it,” hesaid.K Selvaraju, secretary-general, South India Mills Association, also welcomed the GST rate for thetextile sector, calling it an “excellent tax structure.””It would definitely strengthen our industry since we are predominantly cotton-based.Sustainability and competitiveness will sustain.
The net increase on the common man will be “verynegligible. A “lot of disparities” have been sorted out by the government ahead of the GST rollout.2. Concern of Surat’s textile traders over GST implementation:Surat, which is known for its rich and extensive textile business is one of the most affected placedue to GST implementation. The traders and loom owners feel that demonetization coupled witha complicated tax structure of the GST has badly hurt the textile industry due to loss of business.”The products we shipped to whole sellers were returned, as nobody knew how the old stock wouldbe priced,” said Champalal Bothra, a textile trader from Surat and secretary of GST SangharshSamiti, the newly floated organisation under whose banner the protests are being carried out.Not only the mill owners, but textile traders at every level had incurred losses as sales went down.
These people are extremely reluctant to provide documents to support their claim. Officials explainthis is mostly because they’ve been brought under the tax net for the first time.They went on multiple strikes and held various meeting so that the Government listens to theirdemands, among which is to make GST procedures simple, especially for the small textile traders.The Surat textile industry produces about four crore meters of fabric in the dyeing and textile millsin Pandesera, Sachin and Palsana areas every day, with a net worth of about Rs 150 crores. Overthe last 22 days of strike, traders have incurred losses amounting to over Rs 5000 crore.
3. Increase in Textile imports after GST:There was a decline of over 3% in CAGR in textiles and apparels in December 2017 as comparedto December 2016. The figures of textile and apparel exports stood at $2996 million duringDecember 2017 as against $3075 million in December 2016. However, the cumulative export hasslightly improved by 2% CAGR as the exports stood at $26,136 million in April-Dec 2017 incomparison to $25,721 million in April-Dec 2016.Sanjay Kumar Jain, chairman of The Confederation of Indian Textile Industry (CITI) said that theshare of textiles and apparel exports in the All Commodity Exports (ACE) has also declined by2% in December 2017.
While appreciating the cumulative increase in the textiles and clothingexports during April-December 2017, he also expressed concerns over the consistent increase inimports of textiles and clothing during the same period. The imports of textiles during December2017 stood at $165.34 million in comparison to $137.24 million in December 2016, registering anincrease of 20.
48%.Jain also stressed that the on-going scenario is negatively affecting the domestic yarn, fabric andgarment manufacturers. At the same time, he pointed out that India can increase its exports ofcotton yarn and fabrics provided the sector is restored with export incentives.