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Tirupur exporters seek rate cut
Expressing gratitude to the Goods and Services Tax (GST) Council for timely intervention by reducing GST rate for ‘job works’ in Textiles in the council’s meeting held on June 11, Tirupur Exporters Association (TEA) made an appeal to the Union Finance Minister to also cover all job works on apparels.
In the representation TEA president Raja M Shanmugam said the exclusion will cause huge hardships to several micro industries in textile clusters like Tiruppur.
Shanmugam pointed out that only job works pertaining to yarn and fabrics of textiles are eligible for the reduced rate of interest of 5 per cent.
He added that garment printing, embroidery, garment washing, tie and dye, checking, button fixing, labelling, ironing and packing are carried out by micro industries on job work basis of which a few of them are works done at home at a small scale.
He said that 18 per cent GST on these works would create an inverted duty scenario, disturb seamless credit flow and defeat the very object behind GST. Stating that the job workers fall in the middle of the textile manufacturing value chain where credit is ultimately passed on to the final manufacturer, he added that there is no revenue implication because of this change as suggested.
In the joint representation to Union Finance Minister Arun Jaitley and line departments on behalf of 15 industrial associations, TEA highlighted nine points that should be jointly considered by the Union Finance Ministry, Ministry of Textiles, Ministry of Micro, Small and Medium Enterprises and GST Council and come out with a solution at the ensuing GST Council Meeting, to be held on June 18.