AEPC hopes the embedded taxes arising out of the inverted structure will be refunded to exporters through appropriate mechanisms. The duty structure remains inverted with fabric at five per cent GST. AEPC says the key issue of embedded taxes needs to be taken up to address the genuine concerns of exporters and export sentiments. Invisible taxes need to be considered for refund under drawback and Remission of State Levies (RoSL) schemes, so that the calibrated refund provided is representative of the tax incidences incurred by the industry.

In the absence of encouraging duty drawback and RoSL exports from the sector will further witness a sharp decline just ahead of the peak festival season. The appreciating rupee and new levies like GST on intra-company stock transfers, job work, freight and samples have led to cost escalation for exporters further narrowing their low margins in competitive global markets.

There has been a reduction in the rate of GST on man-made items including synthetic filament yarn such as nylon, polyester and acrylic, and artificial filament yarn, yarn of manmade staple fibers, real zari from 18 per cent to 12 per cent. There is a provision 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.