Garment
exporters demanded the restoration of duty drawback and Remission of State
Levies (ROSL) rates to pre-GST levels, claiming that a whopping six million
jobs may be lost in the sector if urgent remedial measures were not taken.India''s
apparel exporters are facing intense competition from countries like
Bangladesh, Pakistan and Vietnam, owing to lower competitiveness.
"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."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 Sudhir Sekhri,
Chairman, Garment Exporters Association.
Addressing a press conference, garment exporters alleged that the government
was "making it difficult" for them to run their businesses and they
had to incur additional compliance costs due to the "tardy
implementation" of the Goods and Services Tax."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.
Ready-made garment exports dipped by about 40 percent to USD 829.44 million in
October.The garment exporters fear that 6 million jobs may be lost in the
sector, which is currently giving direct employment to 12.9 million people,
going by the fall in exports.The
exporters also demanded speedy conclusion of a free trade agreement with Europe
for India to regain its export competitiveness, as the industry had to pay 9.8
percent duty for shipping to Europe.
Besides, the garment exporters demanded clarity on the e-wallet mechanism, full
refund of blocked taxes and that fabric and other inputs be made available to
the garment industry at lower rates.The government last week announced the
post-GST rates for claiming a rebate of state taxes under the scheme for ROSL
on exports of readymade garments and made-ups.It also doubled the rates for
incentives under an export promotion scheme -- MEIS -- to 4 percent for
readymade garments and made-ups.India’s Apparel
exports rose to USD 17.5 billion in 2016 -17 from USD 16.8 billion in 2014-15.
Source: Business Today, India Thursday, 30 November 2017