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FIEO seeks support from State Govt. for uniform GST Rate for Textiles & Leather Sector

 Southern Region of Federation of Exporters organisation FIEO sought support from the Tamil Nadu Government for the GST related issues of export sector especially Textile and Leather sector. 

While highlighting the issues of exporters Dr. A. Sakthivel, Regional Chairman of the Southern region of FIEO said that export sector contributes immensely for the development of the State especially creating huge employment opportunities and hence there is a need to take care of the apprehension of exporters that GST will affect their liquidity.

Mr. Sakthivel also suggested that SGST component of exporters can be loaded to IGST and efficient drawback mechanism should be devised to get immediate refund to the exporters without insisting for documentations and related delays.  IGST and SGST component adjustment can be taken care of by the system. 

A Delegation of FIEO including Mr. Sakthivel and Mr. Rafeeque Ahmed, President, FIEO met Mr. D. Jayakumar, the state's finance minister at Chennai recently and sought support from the State Government for the GST related issues of export sector especially Textile and Leather sector.

While referring to the Textile sector, Mr.Sakthivel said that the sector provides direct employment to 5 crore individuals and generates 6 crore indirect jobs.  Hence it is necessary that the industry should be helped to have continuous growth so that more employment can be generated.  He urged that GST rate of 5% should be applied uniformly across all sectors of Textiles.  Mr. Rafeeque Ahmed, while discussing issues of Leather Sector said that uniform GST should be levied on all sectors of leather with 5 per cent GST instead of announced different slabs for finished, semi-finished leather, etc.

The textile industry is critical to the Indian economy. The industry provides direct employment to 4.5 crore individuals and generates 6 crore indirect jobs. The industry also contributes 10 percent to manufacturing production in the country. With textile commodities holding a 7 point weightage in the Consumer Price Index (CPI), it is an essential commodity in the Indian consumption basket. Therefore, working of the textile industry has a considerable ripple effect not only on the economy, but also on the lifestyle of individuals.

GST can transform textile industry into a single market with predictable tax system, enabling increased value addition, employment, and exports. This opportunity for GST to have a sustained growth for the textile sector can be achieved only through the application of a uniform low GST rate to the sector. A low GST rate of 5 percent, applied uniformly across the sector will propel domestic production, and facilitate and encourage voluntary compliance in the sector. This growth would enable India to achieve its target of generating 35 million jobs, and attracting investment worth USD 200 billion by 2025, M. Sakthivel said.

 Thiru D. Jayakumar, Honíble Minister while appreciating the issues said that as Textiles and Leather having dominant role in Tamilnaduís economic growth, the State Government will provide all possible support for enhancement of Stateís share in international trade as well as voice the concern of these sectors in the GST Council.


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