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Indian textile exporters want GST tweaked

The GST levy on job work means a higher tax incidence on the carpet and apparel sectors. There is a five per cent GST on job work in textiles sector such as cutting, embroidery, finishing, washing or pressing, packing, bleaching, dyeing, printing, knitting, and coloring.

Exporters have asked for an e-wallet, which they can use like a running account where money will be debited from the e-wallet when duty has to be paid to supplies and the amount is credited when the proof of exports is made available. The drawback committee has been asked to look into cases of embedded tax on supplies and provide a refund of duties through the duty drawback mechanism. Exporters have been advised to do their own calculations before opting for higher drawback rates as in certain cases the lower drawback rates with refund of IGST benefits or ITC refund or CGST/IGST may be higher than the drawback rates.
A request has been made either to put zero GST rate on sale/ transfer of scrips or put it at five per cent.

So far the GST regime has led to a problem of liquidity but on the logistics part a lot of improvements are expected.

 
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