Rajkot/Surat: The rollback of Merchandise Export from India Scheme (MEIS) will hit the textile sector in Gujarat hard, as the sector is already facing slowdown due to the implementation of the goods and service tax (GST).
However, the industry is pinning its hopes on the Rebate of State and Central Taxes and Levies (RoSCTL) scheme to compensate the MEIS losses.
According to industry leaders, Gujarat’s textile products including fabrics, garments and made-ups will lose its competitive edge against China and other countries, especially when India has to reap benefits of US’s trade war with other countries.
Also, the import of fabrics from China and Bangladesh—which has increased by over 600% in the last couple of years—will further increase and that the textile fabric manufactured in Surat, Ahmedabad and other centres would not be able to face the stiff price competition.
The annual export of MMF (man made fibre) from Surat is pegged at Rs 1,500 crore.
Immediate past chairman of Synthetic and Rayon Export Promotion Council (SRTEPC), Narain Aggarwal said, “MEIS has been withdraw after objection raised by WTO. However, the central government will be implementing RoSCTL scheme to benefit the textile exports from the country.”
Managing director of Fairdeal Filaments Private Limited, Dhiru Shah said, “The impact of removal of MEIS will be short-term, since the government is implementing RoSTCL scheme. Exporters will get rebate on all the central and state levies and taxes.”
A Surat-based textile exporter, Rakesh Choudhary said, “We book orders in advance computing the tax benefits. An abrupt removal of MEIS by the government will increase our losses” Choudhary. He added that MEIS scheme gave much needed cushion for increasing competitive edge of MMF textile that face price competition from China and other countries. Asian countries incentivize exporters through refund of duties as high as 20%.”
This decision will also impact Jetpur’s Sari industry which is currently facing action by Gujarat Pollution Control Board (GPCB) over release of untreated water in Bahdar river.
Haresh Bhuva president of Dhareshwar GIDC Industrial Association in Jetpur said, “This decision has come at a time when we are already facing liquidity crunch. This incentive was very helpful to boost up our industry and export.”
According to Bhuva the annual export from Jeptur is to the tune of Rs 1,500 crore. The ladies garments including saris, dress material and readymade garments of Jetpur has very good demand in African countries and Sri Lanka with major export from Saurashtra being cotton.
Rahul Mehta, president, Clothing Manufacturers’ Association of India (CMAI), said, “The decision will hurt export revenues, especially on existing export orders, which have already been booked. This is because costing is usually worked out at the time of accepting orders and the incentive is factored in. It will also mean a loss of goodwill for exporters who may be forced to not ship the goods, owing to additional costs.”
Published On : 02-08-2019
Source : India Times
