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Textile industry in TN hopes GST Council will reduce rate to 12%

Says 18% weaving unit will incur additional cost of over Rs 2 lakh per annum

T E Narasimhan  |  Chennai 

GST, tax, economy, currency

is hoping that the Council, which is expected to meet on Sunday would consider reducing rate on man made fibre, filaments and to 12 per cent from the proposed 18%. The state association said independent weaving units may have to incur additional cost of over Rs 2 lakhs per annum.

The Council also has decided not to allow refund of accumulation of input tax credit at fabric stage that attracts only 5 per cent rate.

M Senthilkumar, chairman, Southern India Mills' Association (SIMA) hopes Council tomorrow would also include garments, made-ups and other sewn products related to job work under five per cent rate of service tax.

He said there will be 'huge' accumulation of excess credit with 18 per cent rate on and only five per cent rate and non-refund of accumulated input tax credit at fabric stage. He said that this would significantly increase the fabric cost and seriously affect the independent spinning and weaving units, including sector.

An independent weaving unit having around 50 looms and producing 100 per cent viscose fabric would incur an additional cost of over Rs 2 lakhs per annum if 18 per cent rate is imposed.

Senthilkumar said that even with 12 per cent rate on yarns, the additional cost would be Rs 1.3 lakhs per loom per year and this will create an unhealthy competition between the composite and independent weaving units.

SIMA said the differential rates and non-refund of accumulated input tax credit would not only affect the industry, but also lead to wrong declaration and corruption.

SIMA urged the government to discourage any loophole for wrong declaration and corruption and pleaded for refund of accumulated input tax credit at fabric stage to protect the interest of power loom sector and also meet the clothing needs of economically backward masses of the nation with reasonable tax burden.

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Textile industry in TN hopes GST Council will reduce rate to 12%

Says 18% weaving unit will incur additional cost of over Rs 2 lakh per annum

Textile industry is hoping that the GST Council, which is expected to meet on Sunday would considering reducing GST rate on manmade fibres, filaments and yarns to 12 per cent. The Association said independent weaving unit may have to incur additional cost of over Rs 2 lakhs per annum.At the 16th GST Council meeting on June 11, 2017 it was announced that 18 per cent as the GST rate for manmade fibres, filaments and yarn. The Council also has decided not to allow refund of accumulation of input tax credit at fabric stage that attracts only 5 per cent GST rate.The Council also has not included the job work on garment and made-ups related activities under the list of 5/% rate of service tax. M Senthilkumar, chairman, The Southern India Mills' Association (SIMA) said that the textile industry is hoping for GST Council at its meeting held on June 18, 2017 would consider the representations and reduce the GST rate on manmade fibres, filaments and yarns from 18 per cent to 12 per cent and .. is hoping that the Council, which is expected to meet on Sunday would consider reducing rate on man made fibre, filaments and to 12 per cent from the proposed 18%. The state association said independent weaving units may have to incur additional cost of over Rs 2 lakhs per annum.

The Council also has decided not to allow refund of accumulation of input tax credit at fabric stage that attracts only 5 per cent rate.

M Senthilkumar, chairman, Southern India Mills' Association (SIMA) hopes Council tomorrow would also include garments, made-ups and other sewn products related to job work under five per cent rate of service tax.

He said there will be 'huge' accumulation of excess credit with 18 per cent rate on and only five per cent rate and non-refund of accumulated input tax credit at fabric stage. He said that this would significantly increase the fabric cost and seriously affect the independent spinning and weaving units, including sector.

An independent weaving unit having around 50 looms and producing 100 per cent viscose fabric would incur an additional cost of over Rs 2 lakhs per annum if 18 per cent rate is imposed.

Senthilkumar said that even with 12 per cent rate on yarns, the additional cost would be Rs 1.3 lakhs per loom per year and this will create an unhealthy competition between the composite and independent weaving units.

SIMA said the differential rates and non-refund of accumulated input tax credit would not only affect the industry, but also lead to wrong declaration and corruption.

SIMA urged the government to discourage any loophole for wrong declaration and corruption and pleaded for refund of accumulated input tax credit at fabric stage to protect the interest of power loom sector and also meet the clothing needs of economically backward masses of the nation with reasonable tax burden.

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Business Standard
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Textile industry in TN hopes GST Council will reduce rate to 12%

Says 18% weaving unit will incur additional cost of over Rs 2 lakh per annum

is hoping that the Council, which is expected to meet on Sunday would consider reducing rate on man made fibre, filaments and to 12 per cent from the proposed 18%. The state association said independent weaving units may have to incur additional cost of over Rs 2 lakhs per annum.

The Council also has decided not to allow refund of accumulation of input tax credit at fabric stage that attracts only 5 per cent rate.

M Senthilkumar, chairman, Southern India Mills' Association (SIMA) hopes Council tomorrow would also include garments, made-ups and other sewn products related to job work under five per cent rate of service tax.

He said there will be 'huge' accumulation of excess credit with 18 per cent rate on and only five per cent rate and non-refund of accumulated input tax credit at fabric stage. He said that this would significantly increase the fabric cost and seriously affect the independent spinning and weaving units, including sector.

An independent weaving unit having around 50 looms and producing 100 per cent viscose fabric would incur an additional cost of over Rs 2 lakhs per annum if 18 per cent rate is imposed.

Senthilkumar said that even with 12 per cent rate on yarns, the additional cost would be Rs 1.3 lakhs per loom per year and this will create an unhealthy competition between the composite and independent weaving units.

SIMA said the differential rates and non-refund of accumulated input tax credit would not only affect the industry, but also lead to wrong declaration and corruption.

SIMA urged the government to discourage any loophole for wrong declaration and corruption and pleaded for refund of accumulated input tax credit at fabric stage to protect the interest of power loom sector and also meet the clothing needs of economically backward masses of the nation with reasonable tax burden.

image
Business Standard
177 22