Union Minister for Micro, Small and Medium Enterprises Nitin Gadkari said Monday that the government has taken several steps to address the challenges facing the textile sector and the MSMEs operating in the sector.
In written reply to a question in Rajya Sabha, Gadkari said the stated policy of the Government is to reduce tax burden and increase ease of tax compliance of MSME’s including Textiles MSMEs. For furtherance of this objective, the Government has taken various steps.
Mentioning some such initiatives, the minister pointed that he rate of corporate tax was reduced to 25 per cent for companies with a turnover of uptoRs. 250 crores in Financial Year 2016-17 (covering 99 per cent of domestic companies). This limit is further proposed to be increased to Rs. 400 crores vide Finance (No.2) Bill, 2019.
Similarly, the threshold limit for applicability of presumptive taxation of business income was increased from Rs. 1 crore to Rs 2 crore, he added.
The threshold for maintaining books of accounts on part of individuals and Hindu undivided family has been increased to income of Rs. 2.5 lakh from Rs. 1.2 lakh earlier or total turnover of Rs. 25 lakh from Rs. 10 lakh earlier, the minister said.
The rebate provided under the Income-tax Act, 1961 has been increased and now any individuals or Hindu undivided family having a total taxable income upto Rs. 5 lakh do not need to pay any Income-tax, he added.
Section 80JJAA of the Act provides for deduction in lieu of employment generation. Considering the seasonal nature of the business of an assessee engaged in manufacturing of apparel, the requirement of 240 days of employment has been relaxed to 150 days, Gadkari mentioned in his reply.
Ministry of Textiles has taken up the issues raised by the Textiles Industry/Traders Associations regarding reduction of GST rates on various textile items and actively engaged with the Department of Revenue, Ministry of Finance for getting them resolved, he said.
As a result, many important changes have been made, such as GST rate on job works for entire textile segment i.e. yarn, fabric garments and made-ups was revised from 18% to 5%.
Similarly, initially GST rates for a few Handicraft items have been reduced. Subsequently, GST Council in its 28th Meeting held on 21.7.2018 reduced the GST rate to Zero for two handicrafts items, reduced from 12% to 10% for 15 handicraft items and reduced the GST rates from 12% to 5% on 8 items, he added.
GST rates for Corduroy and velvet fabric has been reduced from 12% to 5%.
Refund ITC to fabrics was allowed with prospective effect (i.e. 27.7.2018). The inverted duty structure on MMR (i.e. 18% on fibre, 12% on yarn and 5% on fabric without refund of ITC) led to stranding of 2% tax at the fabric stage and rendering the weavers uncompetitive in domestic and international markets), the minister added.
Published On : 15-07-2019
Source : SME Times
