The Confederation of Indian Textile Industry (CITI) has welcomed the reduction of service
tax rates for job work services in respect of textiles and textile products
(including MMF yarn, garments, made-ups, etc falling in Chapters 50 to
63) from 18 per cent to 5 per cent. The GST Council decided to reduce GST
rate at its 20th meeting this month.Sanjay K Jain, vice
chairman, CITI thanked finance minister Arun Jaitley, GST Council and textiles
minister Smriti Irani for considering the representation and bringing all the
textile job works under the service list of 5 per cent GST. He explained
that the step will come as big breather to small job work manufacturers in all
segments of textile value chain and will allow the free flow of business across
the value chain. A common rate across the chain would also avoid confusion.
Five per cent GST rate on job works would enable to take full input credit and
also avoid any inverted duty and strengthen the global competitiveness of the
textile industry apart from benefiting the domestic consumers, according to
Jain. He said that such a proactive response from government would enable
the textile industry to become a true global player and encourage Make in
India.He also explained that reduction in tractor spares would help the cotton farmers
as tractor spare parts would be now cheaper.
He further added that the much-expected reduction of GST rate for MMF and
synthetics from 18 to 12 per cent being postponed is disappointing as the
production for the forthcoming quarters was eagerly waiting for this. “We have
apprehensions that Indian market would get flooded with imports from China,
Bangladesh & Sri Lanka, which would end up in huge job losses. Imports are
cheaper than domestic products as the CVD & SAD on imports have become
IGST. Earlier the additional duties, namely, CVD & SAD were a protection
against imports. Hence, industry would need some safeguard measures to ensure
the Make in India initiative doesn’t wash away in the avalanche of imports
(which have post GST become 12 to 16 per cent cheaper),” he said in a CITI
press release.He urged the government and GST Council to accommodate industries
demand of 12 per cent GST rate on MMF and synthetic yarn or refund of duty
under inverted duty incidence at fabric stage as prescribed in GST Act, as it
would facilitate the industry’s growth.
Source: Odisha Samaya, India Friday, 18 August 2017