The Indian textile industry has expressed cautious optimism on the government decision to raise the incentive under the Merchandise Exports from India Scheme (MEIS) for readymade garments and made-ups and notify post-goods and services tax (GST) rates on their exports under the scheme for remission of state levies, saying it will address declining exports.
The textile industry organisations include the Confederation of Indian Textile Industry (CITI), Tiruppur Exporters’ Association (TEA) and the Coimbatore-based Southern India Mills’ Association (SIMA).
The commerce ministry recently enhanced the export incentives to 4 per cent from 2 per cent for the garment and made up sectors under MEIS. Similarly, under the scheme for remission of state levies (RoSL), the government has increased the refund of state levies by an average of 0.5 per cent.
However, the notified drawback and RoSL rates are only interim relief as these benefits have not considered various embedded taxes and inverted duty on fabric stage, according to SIMA.
Both SIMA chairman P Nataraj and TEA president Raja M Shanmugham urged the government in separate press releases to announce the new duty drawback rates without further delay with effect from October 1 to minimise the financial stress of exporters.
Several garment and made-ups exporting units have already curtailed their production to the tune of 20-30 per cent rendering several lakhs jobless, Nataraj said.
Nataraj is hopeful that the government would consider the remaining embedded taxes while announcing the revised duty drawback rates and ensure the same level of competitiveness that the industry had under special export garment package to enable exporters to retain existing customers and remain competitive in the global market.
Noting that the exports of readymade garments had declined by 39 per cent to $829 million in October 2017, CITI chairman Sanjay K Jain said yarn and fabric, which have also witnessed a steep fall in exports, have not been given any relief. Even in garments and made-ups, the overall incentives and refund of duties on exports is still about 3 per cent less than pre-GST levels, he added. (DS)
Source Fibre2Fashion News Desk – India