SRTEPC want GST on yarns to be reduced

Surat: The Synthetic and Rayon Textile Export Promotion Council (SRTEPC) has sought the reduction of Good and Service Tax (GST) on yarns from 18% to 12% and mechanism to refund accumulated input tax credit (ITC) on exports of man-made fibre (MMF) textiles.
SRTEPC chairman Narain Aggarwal met Union commerce and industry minister and gave stock on GST and urged him for the immediate reduction of GST on yarns.
Aggarwal raised the issue regarding the adverse impact of GST on the exports of man-made fibre textiles and the need for immediate action to arrest its decline, which will affect the employment generation and foreign exchange earnings.
The SRTEPC stated that post GST, the tax rate on man-made yarns was increased from 12% to 18%, which has made the cost of fabrics higher. In the GST regime, duties on spun, textured, fully drawn, warp and knit yarns is 18% and 5% GST on fabrics with no refund of ITC has resulted in huge accumulation of underutilized credit with the weavers.
“Blocked state input taxes and duties like transmission charges, electricity duty, cross subsidy on electricity bills, water cess, green tax, local body taxes, road taxes, labour cess, etc. is about 5% of Freight on Board (FOB) value of the textile exports and which are not adjusted in drawback or Rebate of State Levies (ROSL) scheme to the yarn and fabric exporters,” Aggarwal said.