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Sops lower than pre-GST ones: Textile sector

Industry body SIMA expected the Centre to increase RoSL rates by at least 2-3%

T E Narasimhan  |  Chennai 

Textile sector
A worker takes a nap during a power cut in front of yarn-spinning equipment inside a factory. (File photo: Reuters)

Despite the central government enhancing the Merchandise Exports from Scheme (MEIS) and Remission of State Levies (RoSL) for the textile sector, the latter is critical.

The country’s second-largest job generator says the incentives are still less than the pre-goods and services tax (GST) era.

In a notification on Saturday evening, the Centre said the post-rates of were up to a maximum of 1.7 per cent for cotton garments, 1.25 per cent for manmade fibre (MMF), silk and woollen and 1.48 per cent for of blends. And, up to a maximum of 2.2 per cent for cotton made-ups, 1.4 per cent for MMF and silk made-ups and 1.8 per cent for made-ups of blends. For sacks and bags of jute, the rate is 0.6 per cent. All these apply with effect from October 1.

Further, the directorate-general of foreign trade enhanced the rates under from two to four per cent on readymade garment (RMG) and made-ups from November 2017 to June 2018.  Allocation for the scheme is Rs 1,143 crore for 2017-18 and Rs 686 crore in 2018-19. 

had dropped due to competition from countries having duty-free access in the and other major markets. Since the transitional provision of pre-and benefits were extended only up to September, export of RMG had fallen by 40 per cent in October, top the lowest level in 42 months. 

Ashok G Rajani, chairman, Export Promotion Council, says he’s disappointed at the rates, as it was “far below our recommendations and central taxes rebate was not considered at all. Trade is in a dire state”.

M Rajashanmugham, president, Tirupur Exporters Association, says there’s still a 2.7 per cent shortfall compared to incentives drawn before implementation.

P Nataraj, chairman, the Southern Mills’ Association (SIMA), said they’d been expecting at least two to three per cent increase in the rates, considering the various embedded or blocked taxes, central and state. He said he hoped these would be considered while announcing the revised duty and ensure the same level of competitiveness the industry had under the special export garment package. He urged the new duty be announced without further delay, with effect from October 1.

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First Published: Mon, November 27 2017. 01:39 IST
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