AEPC welcomes measures taken by GST Council for exporters
The Dollar Business Bureau
The slew of measures such as reduction of GST rate on man-made fibres, immediate refund of GST and introduction of e-wallet facility for exporters, taken by the GST Council last week, have been welcomed by the Apparel Export Promotion Council (AEPC).
“AEPC welcomes the slew of measures taken by the GST Council under the Chairmanship of Finance Minister Arun Jaitley in its 22nd meeting,” the Exporters’ body said in a statement.
AEPC views that these measures will provide immediate relief to the apparel exporters which have been going through a stressful phase due to various factors, global as well as domestic, it added.
The measures include reduction in the GST rate from 18% to 12% of man-made items like synthetic filament yarn such as nylon, polyester and acrylic etc, and artificial filament yarn, yarn of man-made staple fibres, real zari, etc.
In its meeting, the GST council has decided to make provision for refund of GST for the month of July by October 10 and for August by October 18, which will ease the working capital stress for exporters. An e-wallet facility has also been introduced for exporters to address the refund issue.
Commenting on the steps taken by the Council, AEPC Chairman Ashok G Rajani said, “The changes which have been announced by GST Council will give a great relief to the apparel industry for the immediate term, as the sector has been facing severe liquidity crunch after the introduction of GST.”
However, he said, “Since the duty structure remains inverted with fabric at 5% GST, we are hopeful that the embedded taxes arising out of this inverted structure will be refunded to exporters through appropriate mechanisms.”
AEPC has been raising the issue of embedded taxes on exports at various forums. The issue needs to be taken up in a considerate manner to address the genuine concerns of the exporters and export sentiments. This is important especially in the wake of encouraging transparency, post GST, the statement said.
AEPC is of the view that these invisible taxes which need to be considered for refund under drawback and RoSL (Rebate of State Levies) schemes, so that the calibrated refund provided is representative of the tax incidences incurred by the industry.
In its representation to the concerned Ministries, AEPC has informed that in the absence of encouraging duty drawback and RoSL, exports will further witness a sharp decline just ahead of the peak festival season.