Arvind Limited has signed an MOU with the Government of Gujarat to set up an apparel manufacturing facility under the new Gujarat Apparel policy

 

 Following a recent announcement by the Government of Gujarat with regards to the Garments & Apparel Policy 2017, Arvind Limited, one of India’s largest textile to retail conglomerates, headquartered in Ahmedabad, signed a memorandum of understanding with the Government of Gujarat (GOG) to establish a mega apparel factory. The 300-crore project in Dahegam will produceover 24 million garments once it is fully operational.

 

The MOU was signed today by the honourable Gujarat Chief Minister- Mr Vijay Rupani and Arvind Limited’s Executive Directors - Mr. Kulin Lalbhai and Mr Punit Lalbhai.Commenting on the MOU, Mr Punit Lalbhai said, “Gujarat has always been a leader in textile manufacturing. The Gujarat apparel policy will have a far-reaching impact on helping the state forward integrate into apparel manufacturing and develop vertical solutions for global brands. This progressive policy from the Gujarat government will go a long way in making Gujarat a hub for the end-to-end textile and apparel value chain”

 

Mr. Kulin Lalbhai said “We plan to commence commercial production in the 4thquarter of 2018and we plan to create 10,000 jobs, a majority of which will be women. We are excited to support the Gujarat Apparel policy whose aim is to create 1,00,000 jobs in Gujarat. We are confident that with such a conducive policy Gujarat will emerge as a major destination for garmenting.”

 

 

About Arvind Limited:

 

Arvind Limited, one of India’s largest integrated textile and Apparel Company with a strong presence in branded garments and is one of the largest manufacturers an exporters of textiles products with a turnover of nearly US$ 1.5 billion in FY 2016-17. Arvind has an unmatched portfolio of owned and licensed brands. The company’s own brands include Flying Machine, Unlimited among others, while its licensed product brands include big global names, such as Tommy Hilfiger, Calvin Klein, Arrow, Gant, Nautica, IZOD, US Polo Assn, Hanes, Sephora, The Children’s Place and Gap, and Aeropostale to name a few.

 

Brand name:Jaybharat

Company name: JB Ecotex LLP

Brand Tagline: Fibre Reincarnated

Segment: Recycle Polyester Staple Fibre

Market Share of your Brand in your segment: 12.50% Market Share approx in recycle polyester staple fibre market in India

USP of Brand: High Tenacity Fibre with all qualities parameters near to virgin. Black Fibre is having all colourand other quality values near to Virgin Polyester Fibre.

Branding Strategies in Indian Market / International Market: - To be consistent in quality, strong quality control measures, regular feedback from customers/spinners, best service with best quality in segment

 

Jaybharat Group: We Believe In Delivering Quality 

 

 

We at Jaybharat Group are always open to new ideas. There is serious threat to the environment due to solid waste particularly the plastic waste. With the launch of Swachh Bharat Abhiyan in 2014, we observed that there is strong need for a recycling industry to make India a clean and better place.

 

So we worked on many ideas about recycling waste, but to start a business in private sector it should be commercially viable business. As we are in to textile business since long hence we came to conclusion that recycling of waste PET Bottles into Polyester Staple Fibre would be more suitable to us as we have good technical knowledge, experience, and contacts in the industry and at the same time we can contribute to protect the environment. We started working on said project in January 2015 and started production from October 2015.

 

Challenges / Hardship you faced during the journey:

1.      Selecting the technology which can produce best quality textile grade fibre i.e. high tenacity fibre.

2.      Our project requires 90 tons of waste pet bottles per day, which numbered to approx 4.50 millions waste bottles per day. The collection of such huge quantity of pet bottle waste was very tough. Our team has worked day and night to create strong network of collection centre across the country.

 

Achievement till date

We have produced the best recycle polyester staple fibre in Indian market. All the Quality parameters of our fibre are almost equal to virgin polyester staple fibre. At present we are number one as a quality producer of recycle polyester staple fibre in India. We are first manufacturer in India who produced 1 Denier in recycle polyester staple fibre.

Within 6 months from the start of commercial production we achieved 100% capacity utilisation and now i.e. within 2 years of start of commercial production we are going to double our production w.e.f. October 2017.

Our new plant is also in state of art plant with latest technology, now we have target to produce black and other colours of recycle polyester staple fibre. We are sure that our product i.e. recycle dope dyed polyester staple fibre, will be best in Indian market due to technological advantage.

Vision for reaching for next level

After start of commercial production of our new plant during October 2017, we will be third largest producer of recycle polyester staple fibre in India. Our installed capacity will reach to 150 tons per day.

Our CMD, Jitendra Arya has stated the company with a vision to become second largest producer of recycle polyester staple fibre in India within next 5 years after Reliance Industries Ltd.

 

Further the group also have a vision to enter in to manufacturing of recycle filament yarn. 

A high level of energy, business networking and dynamic synergy was seen atthe 6th edition of Techtextil India where 173 exhibitors from 11 countries showcased a gamut of technical textile solutions to 5,436 visitors from across the country. Smart future textiles, recycled fibers, sustainable alternatives, welding, wearables, functional solutions were among some of the highlights on the showfloor.

 

Closing its three-day run with positive impressions, the 6th edition hosted a series of business andknowledge-oriented features as well as the successful launch of Texprocess in India. The co-location of the Texprocess pavilion with Techtextil India resulted in intense synergy and has created the foundation of what is to become independent co-located platforms for technical textiles and garment machinery in the coming years for India.

 

Pleased with the fair’s expansion into garment machinerysegment andresultant visitor footfall, Mr Martin Legner, Head of Technical Textile Product Management, Stoll said:“ The number of meetings we have had are far beyond my expectations and the quality of people coming in is much better and diverse. We have met many well-established companies as well as spinning companies who are interested in change overs, recieved positive response from the medical industry and in the next edition we hope to see more participation from automotive and sports sectors. We are definitely waiting to come back the next time Texprocess takes place in India.“

 

Director of the renowned Killer Jeans brand(Kewal Kiran Clothing Ltd),Mr. Dinesh P. Jain, who was visiting the fair said: “Visiting Texprocess has been insightful and gave me a chance to see the new technologies on display by our regular vendors. I am looking at initiating new orders soon with exhibitors here.”

 

Techtextil India symposium highlights industry growth vision

 

Led by industry visionaries, the symposium hosted 18 sessions covering a wide range of topics from global trends to domestic market focused subjects like protectiveagrotextiles, aerospace applications, advanced composites, fibreinnovations and smart textiles. 

 

The full-packed hall saw 130 high-profile speakers and delegates from Garware Wall Ropes Ltd, Ginni Filaments Ltd, Grasim Industries Ltd-Birla Cellulose, Reliance, SRF Ltd, Strata Geosystems (India) Pvt Ltd etc who took advantage of the platform to gain insights on new applications and market outlook. Sharing his experience, Mr Manoj John, Vice President – Strategic Initiatives, Sutlej Textiles and Industries Ltd said: “We were here to see if there are any high-tech technologies that we can invest in and the topic which discuses about Carbon Composites seemed very interesting. We also liked the topic that discussed about coatings and finishing in fabrics. They are good value adds for our business.

Presenting a new concept for smart wearable textiles at the symposium, Mr Saumil Shah, Co-founder & VP - Institution Sales, Broadcast Wearables Pvt Ltd who was one of the speakers at the last session explained: “We chose Techtextil India to publicise the launch of our wearable LED shirts and the response has been encouraging. Delegates have shown interest in this new concept and we have acquired good leads with whom we can initiate trade in the coming months.” Having met potential partners at the fair even in previous editions, he added:“We were also here last edition and had some very good discussions and are in the advanced stage of closing deals with a few renowned brands whose contacts we acquired from the fair. It works both ways for my business as I not only acquired leads but could also use this platform to source fabrics and raw materials for my product.”


In conjunction with the symposium, the special telecast of Dornbirn MFC was another first and was highly appreciated by sector players for providing access to the plenary lectures that the industry looks forward to every year. While several exhibitors could not attend this due to the busy schedule at stands, visitors were seen taking advantage of this new feature at the fair. 

 

Partner State Telangana explores long-term global co-operation

 

As the Official Partner State for Techtextil India 2017, Telangana highlighted its policies, potential and textile park at the fair and concurrent symposium. The positive prospects and leads acquired during the three days has ensued a close co-operation with a proposed MoU to be signed between the state of Telangana and Messe Frankfurt for global outreach and promotion of state policies.

 

Mr Mihir Parekh, Director, Department of Handloom and Textiles, Government of Telangana said: "The Telangana state is developing Kakatiya Integrated Mega Textile Park in Warangal over an area of 1,200 acres with full complement of high quality trunk infrastructure. Through this partnership with Techtextil India and Messe Frankfurt India, we want to reach out to this niche sector and invite them to explore the immense growth opportunities that Telangana has to offer. We have acquired good leads and look forward to partnering with them to create a roadmap for technical textiles in Telangana." 

 

State representatives from Andhra Pradesh, Madhya Pradesh and Uttarakhand also visited the fair to explore the investment potential in technical textile industry. 

 

Organisers bring together Centres of Excellence to foster R&D within the sector

 

Standing as the true representation of the industry, Techtextil India also brought together the Centres of Excellence to steer research, ongoing developments and exchange of ideas within the sector. Among the stakeholders represented at the fair were:

 

1.    SITRA: The South India Textile Research Association dedicated to Medical textiles applications

2.    BTRA: The Bombay Textile Research Association dedicated to  Geotextiles applications

3.    ATIRA: The Ahmedabad Textile Industry's Research Association dedicated to Geotextiles applications

4.    DKTE: DKTE Society's Textile & Engineering Institute dedicated toNonwovenapplications

5.    SASMIRA: The Synthetic and Art Silk Mills' Research Association dedicated to Agrotextile applications

6.    PSGTECH: PSG College of Technology dedicated toIndutechapplications

 

Dr U K Gangopadhyay, Executive Director, SASMIRA said: “Techtextil India has given a platform to the eight Center for Excellence units to foster research and development within the sector through networking. Market creation is thebiggest challenge since technical textiles are an important element at every walk of life. There has to be national level awareness on seamless movement between government and the industry where Techtextil India can play a major role.”

 

 

Held biennially in India, the next edition of Techtextil India will take place from 10 – 12 October 2019in Mumbai and continue its focus on the 10 product groups and 12 application areas of technical textiles.

 

The Union Textiles Minister Smt. Smriti Zubin Irani has urged the exporting fraternity to take care of the welfare of artisans who are the backbone of the sector.  The Minister said that design and product development play a crucial role in value realisation and in turn in the benefit that the artisans and producers are able to reap from their products. The Minister said this after inaugurating IHGF - Delhi Fair Autumn 2017, world’s largest handicrafts and gifts fair. The fair is being held at India Expo Centre & Mart, Greater Noida, during October 12 - 16, 2017

Delivering the inaugural address, the Minister applauded the role of Export Promotion Council for Handicrafts in promoting exports of handicrafts.  She noted that handicraft exports have witnessed a year-on-year growth of 13.15% in 2016-17 and has touched Rs. 24,392 crores.  The Minister appreciated the launch of schemes by EPCH under their CSR programme, for education of children of artisans.  The scheme provides full support to education of children of artisans through open schools. 75% of the expenditure will be borne by EPCH and 25% by member exporters. Smt. Irani added that it is the dream of the Hon’ble Prime Minister that no child in the country should be left illiterate.
The Minister appreciated the introduction of “Design Register” scheme by EPCH, which allows hassle-free registration of designs by member exporters.  She said that EPCH design services will definitely help the sector in a big way and will augment the exports of handicrafts from the country, ultimately increasing employment opportunities to artisans.
 
The Textiles Minister expressed her satisfaction that the vision of the Hon’ble Prime Minister to promote the North East is being effectively implemented by EPCH. EPCH has an integrated programme of development of NER handicrafts and handlooms, under which support is provided for design, marketing and skill development.

 

The Minister also noted that for the first time for handicrafts sector, an initiative is being taken to promote Foreign Direct Investment and opportunities for Joint Ventures for both exporters and importers.  A symposium on “Investment Opportunities in Handicrafts Sector” is being organised. This initiative will give opportunities for overseas buyers to bring technical know-how, investment and marketing networks to form joint ventures for promoting Indian handicrafts in the world market.
 
Speaking on the occasion, Chairman, EPCH, Shri O.P. Prahladka spoke of EPCH’s vision for the next five years on technology upgradation.  He said EPCH has just started the “Design and Product Development Technology Mission”. Shri Prahladka also appreciated the support received from Ministry of Textiles and Ministry of Commerce for the smooth implementation of GST.
 
The inaugural ceremony was attended by a large number of overseas buyers. According to Executive Director, EPCH, Mr. Rakesh Kumar, about 2,980 exhibitors of home, lifestyle, fashion, textiles and furniture are participating in the IHGF Delhi Fair.  Over 6,000 buyers from 110 countries are visiting the fair.  Mr. Kumar said that special attractions of this fair include designers’ forum and recycled products.
 

 

he Asia Pacific region has long been pivotal in the Apparel and Textile value chain. Datatex Global is proud to announce the opening of our Indian subsidiary, Datatex India. Demonstrating a commitment to the increasingly interconnected global business ecosystem, it became apparent that expanding with a physical presence in India was the next step in servicing our many existing clients and providing a competency center for partners with Asia Pacific operations.

The scope of Datatex India will be to service our rapidly expanding base of clients on the Indian subcontinent along with providing a support hub for the Asian Partner Community.  Additionally, Datatex India will provide momentum to development and support of the NOW ERP offering.  The local Indian office will launch with a team of 40 consultants all of whom are highly trained on the entire Datatex solution stack and technology platform.  “We are very excited to extend our operations into India but what makes this move especially intriguing is the addition of highly skilled consultants to our core teams. Adding these consultants, all of whom are experienced in best practices for our industry and our products gives us the capability to expand globally with agility”  said Ronnie Hagin the CEO of Datatex.

Datatex India started operations in July of this year and is instrumental in the development of future industry offerings.

Wednesday, 11 October 2017 09:05

Introducing LIVA FASHION ADVISORS

A concept first time introduced by an ingredient brand in India.

 

Mumbai October 2017: Liva, the new age fabric brand from the Aditya Birla Group, has come out with  a one-of-its-kind approach for spreading awareness about the fabric and it attributes. This season Liva will depute Liva Fashion Advisors (LFA) in top four large format stores namely Pantaloons, Shoppers Stop, Central and Reliance Trends.

 

The fashion advisor will help generate awareness on brand Liva and induce trials.

 

Mr. Manohar Samuel, President – Marketing, Birla Cellulose expressed, “Market research conducted by Liva stated that 92% women buyers chose garments made of Liva fabric over other fabrics once they experience the fabric. This gave us the idea of Liva Fashion Advisor at stores. We are confident of the high quality of Liva fabric as it is manufactured through the value chain partners accredited by the Aditya Birla Group. We want the customers to experience the fabric and Liva Fashion Advisors will help us achieve this.”

 

At present Liva Fashion Advisors will be operating out of over 250 stores across 30 cities in the country.

 

About LIVA: Liva is a fabric brand from Aditya Birla Group. Liva stands for high quality fabrics made from Birla Cellulose fibers. Unlike other fabrics which are boxy or synthetic, Liva is a soft, fluid fabric which falls and drapes well. It is comfortable and eco-friendly.

 

About Birla CelluloseBirla Cellulose, the Pulp and Fiber business of Aditya Birla Group is a global leader in Man Made Cellulosic Fibers (MMCF) and a pioneer in India in Viscose Staple Fibre (VSF). A versatile and easily blend-able fiber, VSF is used in apparels, home textiles, women’s wear fabrics, knit wear and non-woven applications.

About Aditya Birla Group: A US $41 billion (Rs.2,50,000 crore) corporation, the Aditya Birla Group is in the League of Fortune 500. Anchored by an extraordinary force of over 120,000 employees, belonging to 42 nationalities. Over 50 per cent of its revenues flow from its overseas operations spanning 36 countries.

The Government has announced the new drawback rates to be effective from 1st October 2017 (post-transition period ending 30th September 2017).  The new All Industry Rates (AIR) for garments is 2% as compared to the 7.7% drawback available till now. This low rate is unexpected as this body blow is coming at a time when the industry is facing continuous decline in exports due to global conditions, rupee overvaluation and uncertainties post by the GST regime.  The industry is already facing severe financial pressure due to the increased working capital requirements under the GST regime and stress due to the above uncertainties keeping the export sentiments extremely low.  The drawback was one of the key policy support measures towards lifting industry's cost competitiveness in the wake of above slew of factors adversely affecting the sector.  With this steep decline in the drawback support over 7000 small & medium enterprises in the apparel exports will be crippled and doomed in uncertainties.  This will have an adverse impact on the employment being provided to over 12 million people be provided by this sector. 

 

Commenting on the issue, Mr. Ashok G Rajani, Chairman Apparel Export Promotion Council said, “The apparel industry needs to book orders in advance for the next season. The uncertainty prevailing for the last three months regarding the GST rates on apparel and job work have already cost the industry's order books. “I think the present new rates are unacceptable and the Ministry of Textiles should immediately consider AEPC’s recommendation for extending the current transition rates till 31st March 2018, to instil confidence in the sector and also ensure a smooth transition into GST and also for sustaining the employment in the sector.  In the absence of an encouraging drawback rates, the exports will further witness a sharp decline just ahead of the peak festival season when the industry was expecting recovery”. 

 

AEPC has been in constant consultation with the Drawback Committee and various ministries for identification and consideration of several embedded / blocked taxes which are presently not subsumed in GST, not considered in the drawback, and hence a loss to the exporters.  The industry was expecting continuation of the present drawback rates till such time as these consultations could be completed and proper measures taken to ensure that exports remain zero rated and no taxes are exported.

 

 

 

 

 

Comparison of the DBK Rates 

 

Duty Drawback for RMG (61 & 62)

 

 

Drawback rate effective from 15th November, 2016

Drawback rate effective from 1.10.2017

 
 

Tariff Item

Product

Rate (%)

Value Cap/ piece (Rs.)

Rate (%)

Value Cap/ piece (Rs.)

 

 61 & 62 

 

 

Of cotton

7.7

146

2%

37.9

 

 

Of blend containing cotton and MMF fibre

9.5

110

2.50%

28.9

 

 

Of MMF fibre

9.8

115

2.50%

29.3

 

 

Of Silk (other than containing Noil silk)

7.6

170

4.80%

107.4

 

 

Of Wool

8.7

404

3.50%

162.5

 

 

Of Blend containing Wool and Man Made
Fibre

--

--

3.00%

103.4

 

 

Of Others

7.6

100

2%

26.3

 


 

 

 

"The announcement of reduction of GST rates for Man-Made Fibre Yarns and its products from 18 percent to 12 percent by Shri Arun Jaitley, Chairman, GST Council has met a long pending demand of the textile industry", stated Shri Sanjay K. Jain, Chairman, Confederation of Indian Textile Industry (CITI). It will help strengthen the entire textile value chain and make Indian Textile Industry globally more competitive.

 

He further stated, I would first like to thank Shri Arun Jaitley ji, Head of GST Council and Ministry of Finance, Smt. Smriti Zubin Irani, Minister for Textiles and all the senior dignitaries of both Ministries and Members of GST Council for making it a big reality! He also stated that CITI being the apex industry chamber of the textile & clothing industry of India, there was a big responsibility on the shoulders of Office-Bearers of CITI to get rid of this anomaly at the earliest. This announcement has brought a great sigh of relief to the entire textile industry and I once again thank everyone who pushed for the change, on behalf of the entire textile industry.

 

Shri Sanjay K. Jain further stated that the announcement has sorted out a big issue of inverted duty for the MMF products as it was causing serious issue of escalation of the cost of synthetic products which was further leading to cheaper imports from the competing countries like China and Indonesia.  As of now, there is no refund of  ITC at fabric stage and under post-GST regime, with abolition of 12.5% Countervailing Duty and 4% Special Additional duty, the import has become much cheaper option than sourcing fabrics from the domestic market.

 

He further stated that CITI had made several representations to the Finance Minister, GST Council and the Textile Minister to immediately reduce GST rate on MMF Yarn and its products to 12 percent from 18 percent to rein in inflation of MMF products and to safeguard domestic producers from getting defunct. He stated that reduced GST rates would greatly benefit not only the spinning and power loom sector but would also support the initiative of Make In India and achieve the national objective of creating more employment opportunities. He also stated that this step of the government will also help the industry to cloth the poor masses of the nation at an affordable cost.

 

Chairman, CITI also thanked the GST Council for giving relief for the blockage in credit of exporters that affects the cash liquidity of the exporters. He also hailed the announcement of processing the refund cheques for July exports by 10th October and August exports by 18th October and also the decision of creating an E-Wallet while from 1st April 2018.  He stated that this would resolve the problem of working capital getting blocked and benefit the exporters. He added that the suspension of reverse charge mechanism till 31.3.2018 will benefit small businesses and substantially reduce compliance costs. Chairman, CITI also welcomed the announcement of easing the compliance burden on medium and small taxpayers and increasing the eligibility of Composition Scheme under GST from Rs.75 lakhs to Rs.1 Crore.  Extending the tax exemption for 100% EOU units, Advance Licensing Scheme and EPCG Scheme and allowing the merchant exporters to purchase with 0.1% tax payment upto 31st March 2018 are a few more announcements that benefit the textile industry, said Shri Sanjay K. Jain.

 

Chairman, CITI hopes that the GST Council would soon consider refund of the accumulated Input Tax Credit at fabric stage especially the processed fabrics and also mandate the duty drawback committee to recommend appropriate duty drawback rates and RoSL rates to sustain the export performance.  He also felt that the Government should extend the transitional provision of giving the pre-GST Duty Drawback and RoSL rates for another 6 months or till the new calculated rates are announced.

 

 

The man-made fibres and yarns were slotted under 18% GST rate while the fabrics were slotted under 5% GST slab with a condition that no refund of Input Tax Credit would be allowed at fabric stage.  This was creating a huge inverted duty problem for the synthetic sector and inflating the cost of synthetic products that already had serious threat by cheaper imports.  Under the post-GST regime, with the abolition of 12.5% Countervailing Duty and 4% Special Additional duty, the import has become cheaper.  The industry has been pleading the GST Council to reduce MMF yarn GST rate from 18% to 12% to avoid the cost escalation of yarn and facilitate the power loom sector to remain competitive.

 

            In a Press Release issued here today, Mr P Nataraj, Chairman, The Southern India Mills Association (SIMA) has profusely thanked the Hon’ble Union Minister for Textiles and Information and Broad Casting, Smt Smriti Zubin Irani for the concerted efforts made to reduce the MMF filament yarn and MMF spun yarn including filament sewing thread GST rate from 18% to 12%.  He also thanked Hon’ble Union Finance Minister and the GST Council Members for favourably considering the genuine demand made by the synthetic sector and announcing the reduced rate at the 22nd meeting.  He said that reduced rate of GST would greatly benefit the spinning and power loom sector, improve global competitiveness and cloth the poor masses of the nation at an affordable cost.

 

            SIMA Chairman also has thanked the GST Council for giving a relief for the blockage in credit of exporters that affects the cash liquidity of the exporters. He has hailed the announcement of processing the refund cheques for July exports by 10th October and August exports by 18th October and also the decision for refunding a notional amount for the remaining months and later adjust the amount in the E-Wallet while implemented from 1st April 2018.  He stated that this would resolve the problem of working capital blockage and benefit the exporters.  He has added that the suspension of reverse charge mechanism till 31.3.2018 will benefit small businesses and substantially reduce compliance costs. He has welcomed the announcement of easing the compliance burden of medium and small taxpayers and increasing the eligibility of composition scheme from Rs.75 lakhs to Rs.1 Crore.  Extending the tax exemption for 100% EOU units, Advance Licensing Scheme and EPCG Scheme and also for the merchant exporters with 0.1% tax payment upto 31st March 2018 are few more announcements that benefit the textile industry says, Mr Nataraj.

 

            SIMA Chief has hoped that the GST Council would soon consider refund of the accumulated input tax credit at fabric stage especially the processed fabrics and also mandating the duty drawback committee to recommend appropriate duty drawback rates and RoSL rates to sustain the export performance.  He has also hoped that the Government would extend the transitional provision of giving the pre-GST duty drawback and RoSL rates for another three months or till the new rates are announced.

 

Coimbatore

7th October 2017

 

To

 

ALL PRESS CORRESPONDENTS:

 

            Favour of publicity,

 

                                                                                                (Dr.K.SELVARAJU)

                                                                                                 Secretary General

 

 

 

 

            Indian textiles and clothing exports has been struggling during the last three years due to the absence of level playing field in the global market mainly because of high tariff rates in major markets and also non-refund of several taxes and levies.  Under the GST regime, it was promised that all taxes and levies would be refunded.  Textiles and clothing industry, the second largest employment provider of the country after agriculture and providing jobs to over 105 million people, was stagnated on export growth during the last three years with around US $ 37 billion. 

 

            The Central Government realizing the need for boosting textile exports and create jobs, announced a special package of Rs.6,006/- crores during September 2016 for garments and included made-ups recently giving enhanced duty drawback rate and also ROSL (Refund of State Levies).   However, the present announcement of the government on duty drawback rates does not synchronize with the earlier government announcement of boosting exports and job creation.  In the present announcement, only the old drawback rates have been retained when Cenvat credit was availed without any change and also without getting into detailed calculation of blocked tax burden on each product.  The textile value chain has been under exempted route since 2004 and the drawback benefit and other export benefits were giving some competitive edge to the Indian textiles and clothing exporters with the competing Nations as India is yet to conclude any FTA with the major markets.  Countries such as Bangladesh, Vietnam have achieved significant growth in garment exports during the last three years while India export is stagnated at US $ 16 to 17 billion per year.

            In a Press Release issued here today, Mr.P.Nataraj, Chairman, The Southern India Mills’ Association (SIMA) has appealed to the Ministry of Finance to have a re-look at the drawback rates applicable for textiles, refund all the blocked, embedded taxes, levies and accumulated input tax credit on fabric especially the processed fabric.  Mr.Nataraj has stated that the cost of dyes and chemicals accounts 30 to 40% of the processing charges.  Dyes and chemicals attract 18 or 28% GST making 3 to 5% accumulation of input tax credit as the fabric or processing job work attracts only 5% GST.  He added that the service tax has been increased 15 to 18% and several services have been brought under tax net under GST. 

 

            The old and new drawback rates for cotton yarn, cotton grey fabric, cotton garment and made-ups are given below:-

Description

Duty Drawback rate 2016-17 (old)

Duty Drawback rate 2017-18 (new)

Cotton yarn

2.5%

1.2%

Cotton grey fabric

4.3%

1.3%

Cotton garment

7.7%

2.0%

Made-ups

7.3%

2.0%

 

            SIMA chief has felt that at yarn stage the actual drawback rate would work out to 2 to 2.5% and at grey fabric stage, the same would work out around 3% while at finished fabric, garments and made-ups would work out to more than 5%.  The exports will suffer very seriously and dwindle down sharply.  Mr.Nataraj has stated that the Government must ensure that no taxes are exported so that the exports will be competitive.  In order to protect the jobs of several millions of people in the textile industry, he has urged the Government to extend the existing drawback benefits till the GST anomalies and problems are fully sorted out and also the realistic drawback rates refunding all blocked, embedded taxes and levies including accumulated input tax credit at fabric stage are fully taken into consideration.

 

 

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