GST on manmade items, synthetic filament yarn such as nylon, polyester and acrylic, artificial filament yarn, yarn of manmade staple fibers, real zari has been reduced from 18 per cent to 12 per cent. A provision has been made 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. A facility of e wallet has also been introduced for addressing the refund issue.

There have also been trade facilitation measures like starting refunds of IGST paid on goods exported outside India from October 10 itself, with the backlogs to be cleared expeditiously, proposed single window refunds of IGST paid on supplies to SEZs and of inputs taxes on exports under Bond/LUT and extending the Advance Authorization / Export Promotion Capital Goods schemes to sourcing inputs from abroad as well as domestic suppliers.

The AEPC feels these changes are expected to give relief to the apparel industry for the immediate term as the sector has been facing a severe liquidity crunch after the introduction of GST. However, since the duty structure remains inverted with fabric at five per cent GST, AEPC is hopeful that the embedded taxes arising out of this inverted structure will be refunded to exporters through appropriate mechanisms.