SURAT: The Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) has stated that the reduction of GST on man-made fibres and yarns from 18 per cent to 12 per cent will provide a major relief in unblocking of the working capital due to the huge accumulation of non-refundable input tax credit (ITC).
The man-made fibres and yarns were slotted under 18 per cent GST rate while the fabrics were slotted under 5 per GST slab with a condition of no refund ITC at fabric stage. This had created a huge accumulation of nonrefundable ITC with the weavers and blockage of working capital. Now, with reduction of GST to 12 per cent this problem will be subsided to a larger extent and more manageable.
SRTEPC Chairman, Narain Aggarwal; said, "The reduction in GST would benefit both the spinning and power loom sector who are the manufacturers and suppliers of yarns to the textile industry. As soon as the benefit is passed on to the entire downward value chain of the textile industry, our textile items in the global market will be more competitive. It will also help in ensuring that the country's poor are clothed at an affordable price"
Aggarwal also stated that the release of held-up refund of IGST paid on goods exported in July from October 10 onwards has come as a big relief to merchant exporters who have put in huge working capital. The refund of the huge amount will be again invested into increasing exports.
"The merchant exporters will now have to pay nominal GST of 0.1 per cent for procuring goods from domestic suppliers for export" said Aggarwal.