The GST Council recently held its 28th Meeting at New Delhi and took a number of decisions that will give a major boost to the Indian economy. Sanjay K. Jain, Chairman, CITI, thanked the GST Council for reducing tax rates on more than 50 items of daily use. Jain also thanked the Prime Minister, Union Minister of Finance, Union Minister of Textiles and GST Council for taking proactive steps in favour of the common man as well the Indian industry as a whole. He stated that the decision will have a major effect on the Indian economy and will strengthen domestic as well as export sector.
Jain welcomed the decision of refund of accumulated credit on account of inverted duty structure to fabric manufacturers. He stated that it was the need of the hour as fabric sector is already facing a lot of difficulties while competing with its counterparts in international market. CITI has been consistently requesting to the government to give relief to the fabric segment as for the overall growth of the textile sector, fabric sector plays an important role and it also generates a sizeable employment opportunities – 40 jobs on 1 crore investment – which is more than any segment of the textile value chain. Hence, decision to allow refund of accumulated Input Tax Credit (ITC) at Fabric stage due to inverted duty structure is a big relief to the textile sector.
He further stated that the rates cut on Chenille fabrics and other fabrics under heading 5801 and Handloom dari to 5% from 12% is a big win for the textile manufacturers who were reeling under immense pressure. It would further boost employment in the powerloom sector, as about 40,000 textile workers have lost their jobs in last one year and would prevent further job losses.
Jain further pointed out that while on the one hand reducing GST rates on the goods of daily use like Sanitary napkins, Refrigerators, Water Heaters, Washing machines, Televisions, etc. will ease out pressure on the common man, refund of ITC on motor vehicles, reduction of rates on ethanol, lithium battery, increasing upper limit for opting composition scheme, filing returns quarterly instead of monthly, increase in threshold exemption limit in hill states, etc. on the other hand, would give big relief to the business community.
Jain further pointed out that allowing quarterly filing of return for the small taxpayers having turnover below 5 crore as an optional facility will ease out pressure on small businessmen/ merchants and is expected to give big relief to about 93% of the over 10 million registered GST payers, from the complex procedures of filing monthly returns. He also praised the decision of levying GST on reverse charge mechanism on receipt of supplies from unregistered suppliers should be applicable to only specified goods in case of certain notified classes of registered persons, on the recommendations of the GST Council.
Jain informed that CITI has been representing to the Government on all the major issues concerning Textile and Clothing Industry and also underlined the fact that the Government has been very receptive while dealing with the issues. He further pointed out that reducing GST rates on man-made fibres and yarn is a long pending industry demand apart from other GST pending issues and hoped, it would further ease out pressure on the MMF sector. The decisions taken in yesterday's meeting are welcome steps and would help the entire manufacturing and service sectors not only to cover the lost ground but would also empower the Indian economy to unleash its true potential and achieve the target set out for the textile and clothing sector.