India has removed the anti-dumping duty on Purified Terephthalic Acid (PTA), a key raw material for the manufacture of manmade fiber and yarn. GST on cotton is five per cent across the entire textile value chain whereas GST rates on manmade fibers and textiles are 18 per cent, 12 per cent and five per cent on fiber, filament yarn/spun yarn and fabrics respectively. This inversion in the duty structure was corrected. So rationalization of GST on the manmade fiber value chain will help to boost growth of the manmade fiber sector.
Exporters are also provided assistance under the Market Access Initiative (MAI) scheme. The interest equalization rate for pre and post shipment credit for exports of the textile sector has been enhanced from three per cent to five per cent. To boost exports in the textile sector, including cotton clothing, the new RoSCTL (Rebate of State and Central Taxes and Levies) scheme was introduced. A special one-time additional ad-hoc incentive of up to one per cent of the FoB value will be provided for exports of apparel and made-ups. The benefits of the Interest Equalization Scheme have been extended to merchant exporters, which was earlier limited to only manufacturer exporters.