Jul 6, 2017
ITF urges govt to reduce GST on MMF yarn to 12%
Jul 6, 2017
The Indian Texpreneurs Federation (ITF) has again urged the government to reduce the Goods and Services Tax (GST) on man-made fibres (MMF) yarn from 18 per cent to 12 per cent. The current GST rate on MMF yarn will lead to increases in fabric costs, and the inability for weavers to compete and, therefore, slow down industry growth. It will also not allow a weaver to take his input credit.
In a presentation made to Suresh Prabhu, minister for railways, ITF said that reducing the MMF yarn GST to 12 per cent will result in a 100 per cent efficient MMF value chain that is capable of competing against other fibres. Weavers will also be able to claim input tax credit (ITC) on yarn if the GST is decreases, said ITF.
The federation has also urged the government to reconsider GST on job work after fabric on apparel of 18 per cent as it truncates the ITC chain, considering that the GST will make weavers unable to utilise full ITC. It will also increase input cost as there's no big ITC for job workers.
By reducing the job work on apparel to 5 per cent, weavers can achieve real cascading benefits by availing full ITC on garments and receive working capital benefits for job working units, according to ITF.
The federation also said that it has taken various efforts such as continuous training for its members, launching 1st day 1st invoice campaign, hand holding the entire value chain and submitting analytical data to GST Council.
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