The GST Council has decided to refund accumulated credit on account of inverted duty structure to fabric manufacturers.
CITI has applauded the decision. CITI has been consistently requesting the government to give relief to the fabric segment as for the overall growth of the textile sector, fabric sector plays an important role and it also generates a sizeable employment opportunities of 40 jobs on each 1 crore investment - which is more than any segment of the textile value chain. Hence, decision to allow refund of accumulated Input Tax Credit (ITC) at Fabric stage due to inverted duty structure is a big relief to the textile sector.
The rates cut on Chenille fabrics and other fabrics under heading 5801 and Handloom dari to 5 per cent from 12 per cent is a big win for the textile manufacturers who were reeling under immense pressure.
It would further boost employment in the powerloom sector, as about 40,000 textile workers have lost their jobs in last one year and would prevent further job losses.