The Cotton Textiles Export Promotion Council (Texprocil) today said fabrics price will come down, subsequently making exports of made ups and garments competitive following GST council's decision to cut GST rates on certain textile items.
Last week, the GST Council has reduced the rates on certain textiles items like chenille fabrics, handmade lace, hand-woven tapestries, hand-made braids and ornamental trimming in the piece, handmade carpets and other handmade textile floor coverings from 12 per cent to 5 per cent.
"The decisions taken by the GST Council to cut rates are in the right direction which will promote growth of the textiles sector. A very significant decision taken by the GST Council is to provide refund of accumulated input tax credit on account of the inverted duty structure to the fabrics manufacturers," Texprocil chairman Ujwal Lahoti said in a statement here.
This move will certainly lead to reduction in the prices of fabrics which in turn will make made ups and garments competitive in the export markets, Lahoti said.
The GST Council's move will go a long way in the growth and development of the textiles sector and will make India a global trading hub for fabrics, he added.
According to Lahoti, the reduction in the GST rates will give a boost to the SME sector as these products are mainly manufactured in this sector.
The GST Council also simplified the tax filing for 93 per cent of the assesses by raising the annual turnover threshold under which businesses can file quarterly returns from Rs 1.5 crore to Rs 5 crore. Certain decisions have been taken which will lead to procedural simplifications. Another significant change was the deferment of the reverse charge mechanism till September 2019.
Lahoti mentioned that there are some areas, which needs to be addressed such as the refund of input tax credits related to capital goods on exports, payment of IGST on exports in the case of domestic procurements under deemed exports, and refund of transitional credits on exports.
The Texprocil chairman said if these issues are also addressed, most of the problems faced by the textiles sector will get resolved.
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