Industry bodies hail GST reforms

CHENNAI: The broad changes announced to the structure of the Goods and Services Tax (GST) regime continued to elicit appreciation from a wide swath of industry bodies on Saturday. The big bang reliefs offered to exporters came in for particular attention, from the textile industry in particular. The Cotton Textiles Export Promotion Council (Texprocil) welcomed the Centre’s decision to provide relief and resolving the liquidity issues faced by the textile exporters.

“We are happy that the government has provided far-reaching relief to the exporting community at the GST Council meeting on Friday,” Texprocil chairman Ujwal Lahoti said, adding that the processing of refunds by October 10 and October 18 would go a long way in solving exporters’ liquidity issues. Lahoti also said the facility given to the merchant exporters, who account for almost 40 per cent of India’s textile exports, to pay a nominal amount of 0.1 per cent as GST while claiming goods from manufacturers for export goods will ensure that they do not face cash flow problems.

The other measures like exempting export promotion schemes like advance authorisation scheme; EPCG from the payment of GST up to March 31, 2018 should lead to a spurt in investments, he added.

Meanwhile. the Southern India Mills Association (SIMA) said that the reduced rate of GST for MMF yarn from 18 to 12 per cent would benefit the spinning and power loom sector. SIMA chairman P Nataraj pointed out that man-made fibres (MMF) and yarns were slotted under 18 per cent GST rate while the fabrics under five per cent with a condition that no refund of Input Tax Credit would be allowed at fabric stage. This was creating a huge “inverted duty problem for the synthetic sector” and inflating the cost of synthetic products that already had serious threat by cheaper imports.

The clarification that gems and jewellery purchases above Rs 50,000 do not require PAN also came in for praise. The jewellery industry on Saturday termed it as a positive step which will boost the festive sales. “This is a great news for the industry and we are thankful to the government for this decision. This is a positive step and will help boost the market sentiment. We look forward to good business during festive season,”  All India Gems and Jewellery Trade Federation (GJF) Chairman Nitin Khandelwal said. 

The government rolled back August 23 notification that notified dealers in precious metals, precious stones and other high value goods as persons carrying on designated business and professions under the Prevention of Money Laundering Act, 2002, on Friday night.