The Cotton Textiles Export Promotion Council (Texprocil) has welcomed 5% GST on yarn and fabrics. The GST Council in its meeting today classified yarn and cotton fabrics under 5% category of GST.
"The rate of 5% for cotton textiles is very progressive and will lead to the growth and development of the entire value chain," Texprocil chairman Ujwal Lahoti said in a statement. "We are happy that Finance Minister has accepted the Councils suggestion for keeping the rates low in order to ensure compliance and encourage the farmers to grow more cotton.
"We also thank Minister of Textiles for extending her unstinted support to get low rate of 5% for the cotton textiles sector," Lahoti said. These low rates will not cast any additional burden on the sector and will ensure that India regains its competitiveness in the textiles sector in world markets.
Lahoti also requested the government to announce draw back rates to take into account the unrebated duties under GST and continue the ROSL scheme for Made Ups and also extend it to fabrics and yarn sector.
The GST rate for textiles will eliminate the cascading effect of duty/taxes which will reduce the costs and improve the competitiveness of the textiles exports, he said. Lahoti also urged the government to ensure speedy refund of input tax credits on exports so that exporters funds does not get blocked.