The Micro, Small and Medium Enterprises (MSMEs) are apprehensive as exports of readymade garments fell by 8.4 per cent post GST. Data reveals exports of readymade garments dropped by 8.4 per cent to $1.39 billion, also Cotton yarn and fabric exports fell by 9.6 per cent to $0.84 billion. Animesh Saxena, an MSME garment exporter explained issues faced by MSMEs during the early GST days continue to trouble the sector. The GST is yet to become a Good and Simple Tax for the country, the low trade figures explains that quite well. Profitability is badly hit as Indian garments are not able to withstand global competition. Duty drawback rate as well as the ‘not very smooth’ GST refund mechanism is leading to a lot of complication.

The Federation of Indian Exporters (FIEO) in a statement said labour intensive sector including garments could not perform well in exports due to the continuing effects of the new taxation in the country. FIEO said, ‘A slowdown in exports from labour-intensive sectors like garments, carpets, handicrafts and man-made textiles was largely due to liquidity crunch as tax refunds have been getting blocked since the introduction of goods and services tax. Exporters have been asking the government to look into the refund issue “seriously” by undertaking a drive so as to clear all cases by March 31, 2018.