NITI Aayog examines tax hurdles in textile sector

economictimes.indiatimes.com:

NITI Aayog is looking into tax anomalies in the textile sector. It had last week convened a meeting of sector related industry bodies to understand the challenges being faced by the sector. “NITI Aayog has sought views of the textile industry on tax related matters that are impeding the growth of the sector,” a senior government official said, adding that the Aayog will firm up its view and make suitable recommendations to the finance ministry for consideration.

Some of the issues raised by the industry, at the recently held stakeholder consultation, included the import duty on cotton and textile machinery and the inverted duty structure in manmade fibre textile value chain. Industry has sought removal of 11% import duty on cotton as a steep rise in cotton prices has eroded the competitiveness of the Indian textile industry. “Issues related to increasing the customs duty on manmade yarn to 10% from the existing 5% to check rising imports along with higher imports of apparel from Bangladesh and Sri Lanka were discussed,” said another official.

Exempting job works in the MSME sector from the goods and services tax (GST), and reducing GST on airfares were the other issues. Industry said that higher GST is making airfare uncompetitive. “This needs to be corrected amid demand slowdown in our major markets and demand is not expected to pickup before September,” said one industry representative.