Published
Nov 29, 2017
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Garment exporters demand pre GST tax rates due to job cuts, decline in exports

Published
Nov 29, 2017

Indian garment exporters reeling under high taxation post GST (Goods and Services Tax) due to high duty drawback and Remission of State Levies (ROSL) rates has requested that the taxation for the industry be restored to the pre GST era.


Garment export from the country had as exporters were losing business post the implementation of GST with exports plummeting every month and if the trend continues exporters feel that around 6 million jobs will be lost in the sector.

"The average duty drawback that we were getting per-GST was 11.5 percent and the Remission of State Levies (ROSL) was an average of 3.5 percent. Post GST, the average drawback has come down from 11.5 percent to 2.25 percent”, said Sudhir Sekhri, Chairman, Garment Exporters Association in a statement.

"Last week, the government has been very magnanimous in increasing the ROSL from the 0.39 percent which was announced in July to 1.7 percent, but we are still short of the 3.7 percent which we were getting earlier," said Sekhri added.

The Indian Government recently had announced measures to incentivise garment exports under the export promotion scheme and MEIS. Government had said that the move was aimed to give India’s garment export industry a much needed boost by doubling export incentive rates for garments under the Remission of State Levies (RoSL) scheme, the Merchandise Exports from India Scheme (MEIS).

With exports continuously falling, the industry is looking for further relief from the Government to make sure that the industry which currently employs around 13 million people does not suffer.

"We had a decline of 41 percent in (garment exports) in October. There may be a 30 percent decline in November. April-October there is a downfall of 5.8 percent. If this trend continues, for the entire fiscal it could be 15-20 percent," said Vinod Dhawan, President of Apparel Exporters and Manufacturers' Association.

As the Indian exporters are losing business to countries like Bangladesh, Pakistan and Vietnam they have also urged the government to expedite the process of signing free trade agreement with Europe to regain market share in the international market.

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