HOME > BUSINESS > Garment exporters seek better ‘zero rating’ under GST

Garment exporters seek better ‘zero rating’ under GST

Representatives of apparel exports met commerce minister Suresh Prabhu and sought certain changes in the tax reimbursement scheme under the current Goods and Services Tax regime.

Apparel exporters are eligible for reimbursement of various state and central taxes under two schemes meant to promote exports: Rebate of State Levies (ROSL) and Drawback (DBK).

However, they said, the reimbursement schemes, as they stand, are not effective as effective as before because of the system of ‘input credits’ under the GST. In other words, part of the tax paid by a manufacturer is at the time of purchasing the raw material, and not at the time of selling the finished product as was the case before.

Ashok G Rajani, Chairman Apparel Export Promotion Council, said such ‘zero rating’ of taxes on items meant for export — via reimbursing for taxes paid by manufacturers — is standard practice across the world, and Indian apparel manufacturers will find it difficult to compete with those from other countries if it is not continued under GST.

Direct subsidy to exporters are not allowed under World Trade Organization’s rules, but reimbursements for ‘zero rating’ are allowed.

Rajani said embedded taxes should also be refunded. These include GST, customs duties and excise charges on diesel consumed by the industry; taxes on electricity, stamp duties and registration charges, motor vehicle taxes, mandi taxes, green taxes, property taxes and so on.

“Zero-rating of exports as prescribed in the GST law will not be complete and will be limited to refunding of input taxes as there are a number of GST taxes, which are invisible and embedded in the FOB value of exports, given the design of the Indian GST.

“Therefore, it is important that the refund of the blocked GST taxes should not be seen as an incentive, but as an enabler of trade neutrality. The minister has assured us every best possible support for the smooth growth of industry and we are hopeful that he will look into the concerns raised by the Industry.”

India is among the top five exporters of garments in the world, after China and Bangladesh. The industry, concentrated in Tamil Nadu and Karnataka, employs tens of thousands of women, often in backward and rural areas.

It is considered the most effective way to create employment for a given investment.

The industry representatives also expressed worry about the strong rupee, which has made their products costlier in foreign countries.

Follow ULTRA.news
Lypsa Gems unveils new portfolio for Middle East clients Lypsa Gems and Jewellery said it will launch a new portfolio of 100 designs under its diamond studded jewelry collection for its wholesale clients in the Middle East."The company is hopeful to receive orders from its wholesalers and jewelry retailers based in the Middle East ...
Raymond opens Ethiopia factory to cut costs, easy access to US, EU Textiles and garments brand Raymond inaugurated a garment manufacturing plant in Ethiopia to gain duty-free access to the US and European markets.The plant was set up at a cost of Rs 100 cr and will employ over 2500 people in the first phase. More people will join later, the...
Raymond shareholders reject sale of JK House flats to promoters Shareholders of Raymond Ltd rejected the sale of apartments in the company's headquarters JK House to certain promoters.Chairman of the company Gautam Singhania had urged shareholders to vote against the resolution as the sale of the apartments would cause losses to the comp...
Apparel exporters bemoan rising rupee, seek support Apparel manufacturing is a big job creator in Tamil NaduIndian apparel makers have sought government intervention to stabilize the rupee, which has been rising in recent months, in stark contrast to the situation in other countries that compete with India in exporting garmen...
SEZ exports eligible for rewards under MEIS and SEIS schemes SEZ exports are now eligible for scripsThe government has extended the rewards under its merchandise and services export from India schemes to units located in special economic zones.Special economic zones are areas -- usually located close to seaports or airports -- whe...
Center imposes stock-holding limits on sugar Faced with the prospect of lower-than-expected production of sugar in the ongoing season due to drought, the government has imposed stock curbs on dealers to prevent speculation and hoarding, the food and consumer affairs ministry said today."With the objective of keeping the...
Industry welcomes move to include made-ups in apparel package SIMA has welcomed the move include made-ups in the apparel packageThe industry has welcomed the move by the government led by Narendra Modi to extend support to the made-ups export industry and said it would help the sector break out of its current slump.The cabinet had ...
Nike starts online sales in India US sports goods manufacturer Nike has started online retail operations in India via its portal Nike.com.India-based users can now order from the global portal and have it home delivered.Earlier, only certain markets such as Australia, Hong Kong and Indonesia were bein...
Aditya Birla´s fashion and retail unit ties up with UK luxury brand Ted Baker Aditya Birla Fashion and Retail Ltd said it entered into agreement with UK based fashion brand Ted Baker.Ted Baker London is a British luxury clothing retail company."We are happy to join hands with Ted Baker and build a strong presence for the brand with Indian consumers...
V2 Retail opens its 32nd store in Sitamarhi, Bihar Value retailer V2 Retail Ltd. said it has opened a new retail store at Sitamarhi, Bihar.By this launch V2 retail currently has 32 operational retail stores across the country.V2 Retail Limited is a retail company in India.It offers more than 70,000 products including...
Ranveer Singh’s rap song for Jack & Jones campaign to go live tomorrow Bollywood´s peppy boy Ranveer Singh will promote the international fashion wear Jack & Jones new campaign "Don´t hold back".The fashion brand has chosen the Bajirao Mastani actor as their new brand ambassador. And the fashion star along with the brand has already made a r...
Nandan Denim to issue 50 lakh warrants at Rs 200 each Nandan Denim Limited (NDL), a Gujarat- based fabric manufacturer, said it is planning to issue 50 lakh convertible warrants to foreign investors at Rs 200 each, aggregating to Rs 100 cr."The company will be issuing 25 lakh fully convertible warrants each to Foreign Portfo...
Mumbai based company claims to make water-absorbing synthetic fabric A Mumbai based company, Fiberweb India, has claimed to have setup facility to modify water repellant properties of polypropylene fabric and transform it into a water absorbing (hydrophilic) substance.Polypropylene, like most petroleum-based synthetic fibers, repels water. Thi...
Pearl Global revenue grows 33%, profits up 6% Pearl Global, one of India’s largest garment maufacturers and exporters, said that their first-quarter revenue grew by 33% to Rs 3,757 crore from 2,820 crore owing to strong growth in demand.The profit though grew by just 6% to Rs. 130 crores from Rs 122 crores due sharp rise...
World’s longest fashion show to be held in Goa The world's longest fashion show will be held in Goa in August, and will go on for 100 hours (4 days) without a break.Over 100 fashion designers, about 1000 male and female models, 35 choreographers, 150 make up artistes, 100 stylists and 50 photographers are expected to par...