1. GST Exemption to
Handloom Sector
Turnover of most of the weavers does not exceed Rs 20 Lakh and therefore
they do not require registration under GST. Moreover, GST is implemented
through an Act of Parliament with States as equal partners in GST Council with
Government of India.
GST has been introduced by the Government of India to rationalize
multiple taxes on goods & services and to bring transparency in the
taxation system. It is applicable to the Textile sectors also, including
handlooms.
This information was given by the Union Minister of Textiles, Smriti
Zubin Irani, in a written reply in the Rajya Sabha today.
2. GST Impact on Apparel Sector
GST rates for garments and made up articles is 5% of sale value not
exceeding Rs. 1000 per piece and 12% for articles of sale value exceeding Rs.
1000 per piece. The GST rates are lesser than the pre-GST incidence of taxes on
these goods. To reduce the cost of garment industry, GST rate on manmade fibre
yarns has been reduced from 18% to 12%. Further, the refund of accumulated
input tax credit on fabrics has also been allowed to reduce cost of fabrics
which is a major input for garments.
As per the data of Directorate General of Commercial Intelligence and
Statistics, export of textile and apparel including handicrafts has increased
by 0.2% from USD 40.1 billion in 2014-15 to USD 40.4 billion in 2018-19.
Increase in imports is primarily due to increase in imports of MMF and cotton
textiles.
Government has enhanced interest equalization rate for pre and post
shipment credit for exports done by MSMEs of textile sector from 3% to 5%
from2.11.2018. Benefits of Interest Equalization Scheme has been extended to
merchant exporters from 2.01.2019 which was earlier limited to only
manufacturer exporters.
To contain increase in imports of textile and apparel, Government
increased Basic Customs Duty on 504 lines comprising apparel, carpets, fabric,
madeups and others from 10% to 20%.
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