Imports to become 5-6 percent cheaper post GST

Posted by Daily Shipping Times on 21-06-2017        Tweet

NEW DELHI: Imports are likely to remain 5-6 per cent cheaper than locally made apparel, despite the goods and services tax providing input credits to the textile industry.

Apparel imports are subject to a countervailing duty (CVD) of 6 per cent on cotton and 12.5 per cent on polyester, which importers receive as a central value-added tax credit. The CVD is optional at a flat 2 per cent if the importer does not claim a set-off against input costs. The Government has provided a 40 per cent abatement on this optional flat duty, which works out to 0.8 per cent. Thus, the total applicable tax is 1.2 per cent for importers who do not claim the set-off. This apart, importers pay a 4 per cent special additional duty (SAD) without any duty protection, which after considering cesses, works out to over 5 per cent.

The Government plans to present a new textiles policy by September. It is also organising Textiles India 2017, a seminar to bring global buyers under one roof, between June 30 and July 2 in Gandhinagar. While 61 countries have booked pavilions, 1,900 stalls are expected to be booked by State Governments and industry players.

“Our aim is to increase textiles exports and create a competitive environment. We would like States to take such initiatives to help the industry showcase its products directly,” said Mr. Anant Kumar Singh, Secretary in the Textiles Ministry. Singh said his Ministry had done some work on the new textiles policy, which would focus on India’s competitiveness in the world market.