The Southern India Mills' Association (SIMA) has welcomed GST era for the textile industry and highly appreciated the government and Union textile minister Smriti Irani for bringing a seamless tax structure for the entire cotton textile value chain at the lowest slab rate of 5 per cent GST rate. The year 2017-18 will be beneficial for the cotton industry.

M Senthilkumar, chairman of SIMA said that the year 2017-18 will be a good year for the cotton textile industry with a sound tax eco system and real time governance coupled with availability of surplus cotton. He added that the textile industry has been suffering with numerous taxes and different types of cess which were adding to the cost indirectly as they were not duty drawback compatible and therefore adding to the cost thus making the industry uncompetitive especially, the MSMEs and decentralised segments.

With the implementation of GST, all indirect taxes would be merged, said the SIMA chief. He also stated that Tamil Nadu accounts for 1/3rd of the textile business of the nation the state governments especially the government of Tamil Nadu should come forward and remove certain taxes and levies that are not subsumed in GST like Market Committee Fee and various other municipal taxes.

SIMA chairman also applauded the efforts made by the Union textile minister for organising Textiles India 2017, the first ever textile industry international event organised by the Government of India by bringing over 1,000 exhibitors, 2,500 overseas buyers and 15,000 domestic buyers. He thanked the Prime Minister for inaugurating the event, visiting the stalls and delivering an inspiring speech at the event, said the association in a press release.

SIMA chief also highly appreciated the thorough understanding by Prime Minister about the textile industry and giving top most priority for the growth of the industry. He also added the active initiative taken by the Chief Minister of Andhra Pradesh and the state government of Telangana, especially KT Rama Rao, minister for panchayat raj & information technology for the efforts taken by them to attract investments in these states. Senthilkumar felt that Textiles India 2017event would greatly enhance the visibility of Indian textile industry in the global market.

SIMA chairman, however, is disappointed for not considering the genuine demand of reducing 18 per cent GST on MMF and blended spun yarn to 12 per cent which will avoid huge inverted duty accumulation at grey fabric stage. He said that the decision of considering any rate revision only after three months would seriously affect the synthetic spinning and grey fabric manufacturing sectors.

He added that the GST Council had presumed that the total duty levied on MMF and its blended spun yarn was 17.5 per cent with 12.5 per cent Central excise and 5 per cent VAT which is true only for filament yarn. He further said that in the case MMF spun yarn over 97 per cent sales was inter-state with 2 per cent CST and almost all the yarn sale was at zero rate optional route with regard to central excise. He stated that the inverted duty would steeply increase the fabric price and make Indian textile uncompetitive as the imports would loom large with a reduction of duty on imports, to the tune of 12 per cent. He also appealed to the Prime Minister and the finance minister to reduce the GST rate on MMF and its blended yarn from 18 per cent to 12 per cent and also include garment and made-ups job work under the 5 per cent service tax list of GST. (KD)

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