Business

Indian Texpreneurs’ Federation Urges Textile Ministry To Keep Sector In Lowest Slab

The Indian Texpreneurs’ Federation (ITF) has urged the Union Textile Ministry that it is justified to keep the sector in the lowest slab of the Goods and Services Tax (GST), due to the inherent nature of the Indian textile sector.

In a recent letter to Union Textile Minister Smriti Irani, ITF Secretary Prabhu Dhamodaran stated that considering the past experience and ability of the sector to absorb taxation, the tax rate could be fixed at eight per cent for cotton textiles, while it could be 12 per cent for blended and man-made fibre based products.

The letter stated that due to the scattered and unorganised nature of micro and small units, a high tax rate would only encourage violation, which would affect even the organised sector.

It suggested that the lowest band of taxation would help achieve the goals of GST besides ensuring absolute compliance by the entire textile industry.

Millions of jobs would be created in the sector when more investment pours in as a result of reasonable and low taxation rate, Dhamodaran stated in his letter.

His letter stated that keeping a particular segment out of the unified tax regime would entirely defeat the very rationale behind its implementation.

In order to ensure that the full benefit of end-to-end input credit and other benefits of national sales tax became available to the industry, it would be necessary for the entire chain of the textile industry – right from cotton fibre to the final apparel – to be under GST, the letter stated.

From agriculture to the end product, any negative impact on the textile industry would affect the entire value chain up to agriculture, the letter to the Union Textile Ministry stated.