Tags

According to the data, apparel export went down by 14% in January this year. AEPC chairman, HKL Magu said that the government has not yet cleared tax refunds worth Rs 4,097 crore under GST.

One year of GST: India's garment industry suffering from GST refund delays Updated Jul 01, 2018 | 14:37 IST | ET Now Digital.

According to the data, apparel export went down by 14% in January this year. AEPC chairman, HKL Magu said that the government has not yet cleared tax refunds worth Rs 4,097 crore under GST

GST Representative Image |Photo Credit: BCCL New Delhi:  The Export Promotion Council of India has said that India won't be able to reach the $20 billion garment export target looking at the continued decline in apparel production. AEPC said India’s apparel production has shown a decline of 4.7% in February and 9.9% from April to February this year. 

FY18. As per the government figures, August, September, October, November and December recorded 6.4%, 7.2%, 11%, 13.1% and 13.5% dip respectively last year as well. There are two reasons for the continuous decline in growth. Lower demand for Indian-made garments in countries like the USA and UK and delay in IGST refunds. According to the data, apparel export went down by 14% in January this year. AEPC chairman, HKL Magu said that the government has not yet cleared tax refunds worth Rs 4,097 crore under GST. 

This has affected the industry majorly as due to fund blockage the manufacturers are not able to pay suppliers on time. Magu said in April this year that “Unresolved issues like cut in the duty drawback after the imposition of GST, slow GST refunds and uncertainties on future of export subsidies have hit the sentiments. The global demand is good and the industry is keen to take up more orders but cost disadvantage is affecting India’s relative position as a sourcing destination”It is to be noted that in 2017 as well the then AEPC chairman Ashok Rajani told the parliamentary panel that the garment industry has not yet witnessed any positive impact of GST. 

In fact, the overall impact of the new tax regime has been burdensome for the apparel exporters especially, small and medium exporters due to a considerable increase of working capital as well as higher transaction cost. 

He further told the panel that this has not impacted the apparel production but have also led to pressure on margins for exporters due to lowering of drawback rates. Worth mentioning that any piece of apparel or clothing whose taxable value does not exceed Rs 1000 per piece is taxed at 5 per cent under GST while any apparel or clothing whose taxable value is more than Rs 1000 per piece is taxed at 12% GST. 

Since AEPC informed the Ministry of Commerce that there has been a shortfall of about 5 per cent under the new GST regime, there are chances that blocked taxes might be refunded through higher drawbacks and RoSL along with GST input tax credit refund. 

Source : Timesnownews

e-max.it: your social media marketing partner