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The Southern India Mills’ Association

Committed to Foster the Growth of the Textile Industry

Enhanced export benefit for garments and made-ups, reduction in hank yarn obligation hailed

The proposed rates of Rebate on State Levies (RoSL) has come at a right time, which would benefit the garmenting and made-ups segments, Southern India Mill’ Association (SIMA) said Thursday.
This would also increase the demand from the downstream sector, thereby strengthening the entire cotton textiles value chain, SIMA Chairman, P Nataraj said here.
In a statement, he said the industry has also been pleading to include spun yarn and fabrics under RoSL benefit for the last two years and the Government should have considered the spinning and weaving / knitting segments as these segments suffer with surplus production capacity for the last few years.
The envisaged demand would not meet the excess supply from the spinning and weaving segments, Nataraj said and appealed to consider the genuine demand of the industry to include spun yarn and fabrics under RoSL.
Thanking Union Textile Minister, Smriti Irani for considering the long pending demand of the spinning sector and reducing the hank yarn obligation from 40 to 30 per cent with effect from January 2019 to enable ease of doing business.
He said that when the hank yarn obligation was reduced from 50 to 40 per cent during 2003, the obligatory quantity was around 930 million kgs and the same had increased over 1,600 million kgs during 2018.
On the other hand, the number of handlooms were 31.37 lakhs during 1997-98, which got reduced to 21.46 lakhs during 2009-10, he said.
The proportionate reduction in obligation works out to less than 15 per cent and therefore, there is a room to reduce the obligation further by 10 per cent, since as per the Handlooms Census 2009-10, the actual hank yarn requirement works out to less than 10 per cent, Nataraj said.
The Union Cabinet chaired by the Prime Minister, Narendra Modi today has approved the Scheme to rebate the State and Central Embedded Taxes to support the textile sector and boost exports.

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