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Mills want GST revisions to avoid misrepresentations

The Southern India Mills’ Association (SIMA) says there will be huge accumulation of excess credit with 18 per cent GST rate on yarn and only five per cent GST rate and non-refund of accumulated input tax credit at the fabric stage.

SIMA feels this would significantly increase the fabric cost and seriously affect the independent spinning and weaving units including the power loom sector. The textile industry wants the GST rate on manmade fibers, filaments and yarns to be reduced from 18 per cent to 12 per cent and garments, made-ups and other sewn product related to job work to be included under five per cent GST rate of service tax.

As of now 18 per cent is the GST rate for manmade fibers, filaments and yarn. Refund of accumulation of input tax credit at the fabric stage that attracts only five per cent GST rate will not be allowed. Job work on garment and made-ups related activities has not been included under the five per cent rate of service tax.

SIMA says the differential rates and non-refund of accumulated input tax credit would not only affect the industry but also lead to wrong declaration and corruption. It has pleaded for refund of accumulated input tax credit at the fabric stage to protect the interests of the power loom sector.

 
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