India's textile exporters expect easing of working capital

This is major relief for the textile industry, said Ujwal Lahoti

The country’s textile industry is pleased at the news that the central government would, in a fortnight, release 60 per cent of the estimated Rs 25 billion of dues under the Refund on State Levies (ROSL), held by it since the goods and services tax (GST) was implemented last year.

“This is major relief for the textile industry. Exporters were facing a working capital squeeze due to blockage of such a large fund under ROSL. Also, exporters were paying interest to lenders on the blocked amounts. Textile exporters would now get relief from this double blow,” said Ujwal Lahoti, chairman, Cotton Textile Export Promotion Council.

“ROSL was a major issue facing the the entire industry for long. While the government’s intention was clear in favour of releasing the fund, actual disbursal was an issue until now. With the government’s fresh commitment for speedy release, textile exporters would get easy refund of state taxes. This would improve their liquidity,” said R K Dalmia, president, Century Textile and Industries.

Lahoti added: “Some policy measures like refund of embedded taxes (also recognised by the Economic Survey for 2017-18), extending the ROSL scheme which refunds state levies like value added tax and generation of captive power, mandi tax, duty on electricity, stamp duties on export documents, etc, and to expedite the refund of pending GST and IGST claims, and ROSL of exporters need to be considered on priority basis.”