The GST Council, in its meeting held recently classified yarn and cotton fabrics under 5 percent category of GST.
“The rate of 5 percent for cotton textiles is very progressive and will lead to the growth and development of the entire value chain”, said Chairman of The Cotton Textiles Export Promotion Council (Texprocil), Ujwal Lahoti.
Texprocil welcomed the rate of 5 per cent for yarn and fabrics and also thanked the Minister for Finance and Minister Of Textiles for accepting the council’s suggestion for keeping the rates low in order to ensure compliance and encourage the farmers to grow more cotton. These low rates will not cast any additional burden on the sector and will ensure that India regains its competitiveness in the textiles sector in world markets.
Ujwal Lahoti Chairman Texprocil also requested the Government to announce draw back rates to take into account the unrebated duties under GST and continue the ROSL Scheme for Made UPS and also extend it to fabrics and yarn.
The GST rate for textiles will eliminate the cascading effect of duty/taxes which will reduce the costs and improve the competitiveness of the textiles exports, according to the Chairman, Texprocil. He urged the Government to ensure speedy refund of Input Tax Credits on exports so that exporter’s funds do not get blocked.