In the post-GST implementation period, the exports of garment and made-ups have been struggling due to inadequate export benefits and tariff barriers in the global market. The industry Associations and export promotion councils have been pleading the government to refund the blocked and embedded taxes so as to enable the industry to remain competitive and mitigate the challenge of trade barriers to a certain extent. The Union Cabinet chaired by the Hon’ble Prime Minister, Shri Narendra Modi on 7th March 2019 has approved the Scheme to rebate the State and Central Embedded Taxes to support the textile sector and boost exports.
In a Press Release issued here today, Mr.P.Nataraj, Chairman of The Southern India Mills’ Association (SIMA) has stated that the proposed rates of RoSL has come at a right time and felt that it would benefit the garmenting and made-ups segments. He has added that this would also increase the demand from the downstream sector and thereby strengthen the entire cotton textiles value chain.
SIMA chief has pointed out that the industry has also been pleading to include spun yarn and fabrics under the RoSL benefit for the last two years. He has said that the Government should have considered the spinning and weaving / knitting segments as these segments suffer with surplus production capacity for the last few years. He has further said that the envisaged demand would not meet the excess supply from the spinning and weaving segments. He has appealed to the Government to consider the genuine demand of the industry and include spun yarn and fabrics under RoSL and enable these segments to revive from the financial stress being faced during the last three years.
SIMA Chairman has thanked the Hon’ble Union Textile Minister for considering the long pending demand of the spinning sector and reducing the hank yarn obligation from 40% to 30% with effect from 1st January 2019 to enable Ease of Doing Business. Mr.Nataraj has stated that when the hank yarn obligation was reduced from 50% to 40% during 2003, the obligatory quantity was around 930 million kgs and the same had increased over 1600 million kgs during 2018. On the other hand, the number of handlooms were 31.37 lakhs during 1997-98 and the same got reduced to 21.46 lakhs during 2009-10 handloom census. He has said that the proportionate reduction in obligation works out to less than 15% and therefore, there is a room to reduce the obligation further by 10%. Mr.Nataraj has stated that as per the Handlooms Census 2009-10, the actual hank yarn requirement works out to less than 10%.