The GST Council, at its 28th meeting in New Delhi, took a number of decisions that will give a major boost to the Indian economy.
Mr. Sanjay K. Jain, CITI Chairman, thanked the GST Council for reducing tax rates on more than 50 items of daily use. He also thanked the Prime Minister, the Union Minister of Finance, and the Minister for Textiles and the GST Council for taking proactive steps in favour of the common man as well the Indian industry as a whole. The decision will have a major effect on the Indian economy and will strengthen both the domestic and export sectors.
Mr. Jain also welcomed the decision of refund of accumulated credit on account of inverted duty structure to fabric manufacturers. He stated that it was the need of the hour as the fabric sector is already facing a lot of difficulties while competing with its counterparts in the international market.
CITI has been consistently urging the Government to give relief to the fabric segment as, for the overall growth of the textile sector, the fabric sector plays an important role by also generating stable employment opportunities. Hence the decision to allow refund of accumulated input tax credit (ITC) at the fabric stage due to inverted duty structure is a big relief to the textile sector.
Mr. Jain further stated that the rates cut on Chenille and other fabrics under heading 5801 and handoom dari to 5% from 12% is a big win for the textile manufacturers who were reeling under immense pressure. It would further boost employment in the powerloom sector, as about 40,000 textile workers have lost their jobs in the last one year, and would prevent further job losses.
He pointed out that while on the one hand reducing the GST rates on the goods of daily use like sanitary napkins, refrigerators, water heaters, washing machines, TV, etc., will ease out pressure on the common man, the refund of ITC on motor vehicles, reduction of rates on ethanol and lithium battery, increasing the upper limit for opting composition scheme, filing returns quarterly instead of monthly, increase in the threshold exemption limit in the hill States, etc., on the other hand, would give big relief to the business community in general.
Allowing quarterly filing of return for the small taxpayers having a turnover below Rs. 5 crores as an optional facility will ease out pressure on small businessmen / merchants and is expected to give big relief to about 93% of the over 10 million registered GST payers from the complex procedures of filing monthly returns.
He also said that the decision of levying GST on reverse charge mechanism on receipt of supplies from unregistered suppliers should be applicable to only specified goods in case of certain notified classes of registered persons on the recommendations of the GST Council.
Mr. Jain also observed that CITI has been representing to the Government on all the major issues concerning the textile and clothing industry and also underlined the fact that the Government has been very receptive while dealing with these issues. He pointed out that reducing GST rates on man-made fibres and yarn is a long-pending industry demand, apart from other GST pending issues, and hoped that it would further ease out pressure on the MMF sector.
The decisions taken at the meeting are welcome steps and would help the entire manufacturing and service sectors not only to cover the lost ground but would also empower the Indian economy to unleash its true potential and achieve the targets set out for the textile and clothing sector.