Indian apparel export industry has welcomed the measures taken by the GST Council under the Chairmanship of Arun Jaitely, Union Finance Minister. These measures will give immediate relief to the apparel exports sector, which has been going through a difficult phase due to various factors. These include reduction in the rate of GST on manmade items viz synthetic filament yarn such as nylon, polyester and acrylic etc. and artificial filament yarn, yarn of man-made staple fibres, real zari from 18 to 12 per cent.
The GST council has also made a provision for refund of GST for the month of July by October 10 and for August by October 18 which will ease the working capital stress. A facility of e-wallet has also been introduced for addressing the refund issue. Industry also welcomed the trade facilitation measures like starting refunds of IGST paid on goods exported outside India from October 10 itself, with backlogs to be cleared expeditiously, proposed single window refunds of IGST paid on supplies to SEZs and of inputs taxes on exports under Bond/LUT and extending the Advance Authorization (AA) / Export Promotion Capital Goods (EPCG) schemes to sourcing inputs from abroad as well as domestic suppliers.
The exporters have been raising the issue of embedded taxes on exports at various forums. This key issue needs to be taken up in a considerate manner to address the genuine concerns of the exporters and export sentiments. This is important especially in the wake of encouraging transparency, post GST. They are of the view that these invisible taxes, which need to be considered for refund under drawback and ROSL schemes, so that the calibrated refund provided is representative of the tax incidences incurred by the industry.
Besides, the Drawback committee at its upcoming meeting, would also consider the requisition of the industry for increasing the Duty Drawback rate after including embedded taxes like transportation of raw materials and input, usage of petro products, for generation of electricity etc., which were not taken into account earlier mainly to enhance the competitiveness and also to protect SME exporters.
