SURAT: The Synthetic and Rayon Textile Export Promotion Council (SRTEPC) has sought the reduction of GST on yarns from 18 per cent to 12 per cent and mechanism to refund accumulated input tax credit (ITC) on exports of man-made fibre (MMF) textiles. Chairman of SRTEPC, Narain Aggarwal, Chairman met Commerce and Industry Minister, Government of India and gave stock on GST and urged him for the immediate reduction of GST on yarns. Aggarwal raised the issue regarding the adverse impact of GST on the exports of manmade fibre textiles and the need for immediate action to arrest its decline, which will affected the employment generation and foreign exchange earnings. The SRTEPC stated that post GST the tax rate on manmade yarns has been increased from 12 per cent to 18 per cent, which has made the cost of fabrics higher. In the GST regime duties on spun, textured, fully drawn, warp and knit yarns is 18 per cent and 5 per cent GST on fabrics with no refund of ITC has resulted in huge accumulation of unutilized credit with the weavers. "Blocked un rebated state input taxes and duties like transmission charges, electricity duty, cross subsidy on electricity bills, water cess, green tax, local body taxes, road taxes, labor Cess, etc. is about 5% of Freight on Board (FOB) value of the textile exports and which are not adjusted in drawback or Rebate of State Levies (ROSL) scheme to the yarn and fabric exporters" said Aggarwal.
Source: Times of India
The Goods and Services Tax (GST) Council, in its upcoming meeting on Friday, is likely to give a major relief to exporters as well as small and medium enterprises (SMEs). These segments have been affected the most by the new indirect tax regime, which has depressed the economic growth numbers in the first quarter of the current financial year because of destocking on account of uncertainties before the GST was introduced on July 1. The meeting comes after three most powerful persons in the current political dispensation — Prime Minister Narendra Modi, Bharatiya Janata Party (BJP) President Amit Shah, and Finance Minister Arun Jaitley — huddled together to discuss economic and political issues. Shah cut short his visit to Kerala to attend the meeting. Jaitley also skipped a World Economic Forum event in Delhi to attend the meeting. Growth declined to 5.7 per cent, the lowest in any quarter since the BJP came to power three years ago. The Council is likely to make filing returns for SMEs easier. Those with an annual turnover of up to Rs 1.5 crore will be allowed to file quarterly returns. Also, the composition scheme, which allows a flat rate and easy compliance, may be relaxed to rope in those with an annual turnover of up to Rs 1 crore against the current Rs 75 lakh. About 540,000 taxpayers opted for the scheme under the new window of about a fortnight till September 30, compared to one million as of August 16 (the earlier deadline). The number of taxpayers under the composition scheme, at 1.5 million, is about a sixth of the 8.9 million assessees under the GST. Under the scheme, a trader pays the GST at one per cent, a manufacturer at two per cent and a restaurant owner at 5 per cent, but they are not allowed input tax credit. They are permitted to file quarterly returns. The meeting is likely to discuss a report of a committee, headed by Revenue Secretary Hasmukh Adhia, to address the problems of exporters. Based on that the Council is likely to recommend some relaxation for them so that their working capital, locked up in refunds, is released, according to officials. Also, the Central Board of Excise and Customs will inform the Council that it is ready to release integrated goods and services tax (IGST) refunds to exporters from October 10. The government has allowed exporters to furnish letters of undertaking (LUT) instead of bonds, which will ease the compliance burden and stop the locking up of capital. Exporters say more than Rs 65,000 crore of capital is stuck because they have to first pay the IGST and then file for reimbursement paid on imports that are accounted for in exports. This was not the case in the earlier tax regime. Two months after the roll-out of the GST regime, the order books of exporters are said to have taken a hit, with estimates pegging the impact at up to 15 per cent across industries and product categories. According to an assessment by the Federation of Indian Export Organisations (FIEO), the large drop was for export orders that were meant to be delivered until October. Beyond October, this may rise to 20 per cent, as exports during Christmas and New Year may be affected. The share of exports in GDP declined to 18.2 per cent in the first quarter of the current financial year from 19.3 per cent a year ago. After growing in single digits in the previous three months, exports in August rose by 10.29 per cent, up from 3.94 per cent in July. But exporters and economists are sure that the coming months would prove to be the real challenge for merchandise exports. Besides, the Centre is likely to release Rs 8,500 crore to states as compensation for losses incurred by them in the first two months of the GST roll-out. This will come up for discussion during the meeting. The cess to be distributed by the Centre to states would be about more than half of the Rs 15,021 crore collected as compensation cess during July and August, Rs 7,198 crore and Rs 7,823 crore, respectively. “The compensation demand by states is lower than the cess collected. This indicates that the scale of revenue loss feared by states is much lower. However, these are early days. In a few months, the actual picture will emerge,” said a government official. The government’s overall GST collection stood at close to Rs 95,000 crore in July, and Rs 90,669 crore in August. Neither BJP sources nor officials were willing to comment on the details of the meeting (attended by Modi, Jaitley, and Shah). However, sources said they discussed GST hassles for exporters and SMEs, besides political issues. Modi is scheduled to be in poll-bound Gujarat on October 7 and 8. Meanwhile, traders in Surat met Adhia on Wednesday.
Source: Business Standard
A major revamp of the goods and services tax (GST), which came into force on July 1, will be on the agenda of the GST Council on Friday as part of efforts to address the grievances of small-scale industries, traders and exporters, officials said. The package of measures expected to be taken up by the apex decision-making body may in clude an increase in the threshold limit for the composition scheme, a more liberal exemption limit, and a lower compliance burden with quarterly rather than monthly filing apart from steps to boost exports. The council meeting on Friday could consider raising the threshold for the composition scheme. 1-1.5 crore from to ` 75 lakh to aid micro, small and medium enterprises (MSME). Under the composition scheme, an entity pays a fixed, nominal rate to avoid GST-related paperwork. While industry is pushing for raising the threshold to. ‘1.5 crore, the council will take into account concerns of the finance ministry and some states about revenue losses. Small businesses such as traders, manufacturers and restaurants can pay tax at 1%, 2% and 5%, respectively. Businesses with a turnover of up to `. 20 lakh are exempted from payment of tax. Higher thresholds will ease the compliance burden and also reduce the filing load on the system. Prior to the rollout of the GST, excise duty on turnover of up to ` . 1.5 crore had been exempted. The council could extend the quarterly filing facility to small businesses with a turnover of up to . 1.5 crore.` Besides, an `e-wallet' facility for exporters that will allow them to get tax credit immediately on self-declaration post exports could be taken up. “Industry has represented to us... Steps are under consideration,“ said a government official, adding that the final call on the measures would be taken by the council. Kerala finance minister Thomas Isaac said GST compliance requirements were hurting the MSME sector and there was a case for raising the composition threshold to what was earlier the exemption limit. “Small-scale industry sector is facing huge compliance issues. Composition threshold should be raised to earlier excise exemption limit level,“ Isaac told ET. Among the other steps that could be taken up are including only taxable items in the Rs 20 lakh exemption limit. There is now no differentiation between exempted goods and non-exempted goods while calculating this. Filing of returns could also be further simplified as part of the revamp of overall compliance to make it easier to do business, a key aim of the government.
EXPERTS SEEK EASIER COMPLIANCE
“The composition scheme needs to be strengthened to bring relief to the small taxpayers by not only increasing the threshold limit of eligibility but also by removing the irritants of payments on reverse charge and inter-state supplies,“ said Bipin Sapra, partner, EY. The scheme needs to be made more accessible to other non-restaurant service providers and those that have inter-state business. “ Along with increase in threshold, the GST council should also broaden the eligibility criteria by allowing service providers (with possibly a slightly higher rate) and inter-state transactions,“ said Pratik Jain, leader, indirect taxes, PwC.
RELIEF FOR EXPORTERS
The council will consider steps to give relief to exporters with thousands of crores in refunds stuck in the system and facing acute working capital shortages.
Based on that, the Council is likely to recommend some relaxation for exporters so that their working capital, which is locked up in refunds, is released, officials said. Moreover, the apex indirect tax body CBEC will inform the Council that it is ready to release Integrated GST (IGST) refunds to exporters from October 10. In a meeting with the revenue secretary last month, exporters had said that an estimated Rs 65,000 crore is locked up in GST refunds. Officials also said that easy compliance for exporters, like quarterly filing of returns instead of monthly filing, is likely to be discussed by the Council. The government has already allowed exporters to furnish Letter of Undertaking (LUT) instead of bonds at the time of exports, which will ease the compliance burden and stop locking up of capital.
Source: Business Standard
Hyderabad: It’s been a quarter since GST came into force, but the new indirect tax has already caused considerable damage to the textile trade in both the Telugu states with traders facing acute credit crunch and drastic fall in margins owing to abnormal increase in credit cycles. Post the GST implementation, consumers are also coughing up 8 per cent more as textiles attract 5 per cent tax now and there is significant administration cost involved in filing returns. “With GST adversely disrupting trade credit cycle, the net margins in the textile business have drastically slipped below the tax rate i.e. 5 per cent. Textile traders particularly wholesalers in both the Telugu states are reeling under severe credit crunch as GST has been impacting their cash flows,” Ammanabolu Prakash, president, Telangana State Federation of Textile Associations (TSFTA), told The Hans India. The industry body represents over 30,000 merchants in 31 districts of Telangana. Prakash said situation was no different in Andhra Pradesh. According to industry insiders, the credit cycle of textile wholesalers, who operate on razor-thin margins, has already gone up to six months from the usual 90 day-period thanks the twin blows of demonetisation and GST. “Textiles business runs on wafer-thin margins and is mostly credit-based. Demonetisation has crippled our business. Now, paying tax every month, including three returns is squeezing traders post the implementation of GST. There was no tax on fabric until GST came into force. But unfortunately, the Centre imposed tax on this business despite strong protests. We are not facing innumerable problems, including drastic fall in margins,” a wholesaler at General Bazar in Secunderabad lamented. He was not willing to be quoted fearing tax authorities. Technical glitches of GSTN portal which is used for filing returns are compounding their woes. Added to it, they have to raise an e-way bill number for transactions valued over Rs 50,000. Many traders complained that this process was time-consuming. “Under GST regime, if a trader is ferrying goods worth of over Rs 50,000 within or outside state, he will have to secure an e-way bill by prior online registration of the consignment. To generate an e-way bill, the seller and transporter with details of purchaser will have to upload details on the GSTN portal. Then only EBN will be available to the supplier, the recipient and the transporter on the common portal. Why EBN is required, when seller and buyer both are registered with GST. Moreover, the Rs 50,000 threshold is very less for volume-based textile business. We want the government to raise this bar,” said another wholesaler. Textile merchants, nearly 40 per cent of them are under GST fold, want scrapping e-way bill as raising e-way bill number (EBN) is time-consuming process and redundant.
Source: The Hans Times
Surat: BJP leaders are these days trying to pacify textile traders of 165 textile markets in the country's largest man-made fabric (MMF) wholesale market in the city. For, the traders had announced that they will celebrate 'black Diwali' and not illuminate the textile market buildings on Ring Road to protest against the Centre's stand on Goods and Services Tax (GST). Navsari MP C R Paatil dashed off to New Delhi along with a small group of textile traders under the banner of South Gujarat Textile Traders' Association (SGTTA) to meet Union revenue secretary Hasmukh Adhia on Wednesday. Paatil also sent an official communique stating that their meeting with Adhia went off well. The demands put forth by textile traders were regarding 5 per cent GST on unstitched dress material worth Rs 1,000, filing of GST return quarterly instead of monthly, increase in reverse charge from Rs 5,000 to Rs 25,000 payment etc. Traders are happy that the Union revenue secretary was positive to their demands. However, Paatil had reportedly ignored the office-bearers of Federation of Surat Textile Traders Association (FOSTTA), who had given the call for 'black Diwali'. This has not gone down well with them. FOSTTA president Manoj Agarwal said, "We welcome the pro-active attitude of Union revenue secretary. We had met him in the past many times and even the Union ministers, but nothing happened. We can't believe them until get things in writing." Textile Yuva Brigade (TYB) leader Gajendra Singh said, "If our demands for GST simplification are met, we will certainly celebrate Diwali in the textile markets. We are eagerly waiting for the GST Council's meeting on October 6."
Source: The Times of India
NEW DELHI: A major revamp of the goods and services tax (GST), which came into force on July 1, will be on the agenda of the GST Council on Friday as part of efforts to address the grievances of small-scale industries, traders and exporters, officials said. The package of measures expected to be taken up by the apex decision-making body may include an increase in the threshold limit for the composition scheme, a more liberal exemption limit, and a lower compliance burden with quarterly rather than monthly filing apart from steps to boost exports. The council meeting on Friday could consider raising the threshold for the composition scheme to Rs 1-1.5 crore from Rs 75 lakh to aid micro, small and medium enterprises (MSME). Under the composition scheme, an entity pays a fixed, nominal rate to avoid GST-related paperwork. While industry is pushing for raising the threshold to Rs 1.5 crore, the council will take into account concerns of the finance ministry and some states about revenue losses. Small businesses such as traders, manufacturers and restaurants can pay tax at 1%, 2% and 5%, respectively. Businesses with a turnover of up to Rs 20 lakh are exempted from payment of tax. Higher thresholds will ease the compliance burden and also reduce the filing load on the system. Prior to the rollout of the GST, excise duty on turnover of up to Rs 1.5 crore had been exempted. The council could extend the quarterly filing facility to small businesses with a turnover of up to Rs 1.5 crore. Besides, an ‘e-wallet’ facility for exporters that will allow them to get tax credit immediately on self-declaration post exports could be taken up. “Industry has represented to us… Steps are under consideration,” said a government official, adding that the final call on the measures would be taken by the council. Kerala finance minister Thomas Isaac said GST compliance requirements were hurting the MSME sector and there was a case for raising the composition threshold to what was earlier the exemption limit. “Small-scale industry sector is facing huge compliance issues… Composition threshold should be raised to earlier excise exemption limit level,” Isaac told ET. Among the other steps that could be taken up are including only taxable items in the Rs 20 lakh exemption limit. There is now no differentiation between exempted goods and non-exempted goods while calculating this. Filing of returns could also be further simplified as part of the revamp of overall compliance to make it easier to do business, a key aim of the government.
EXPERTS SEEK EASIER COMPLIANCE
“The composition scheme needs to be strengthened to bring relief to the small taxpayers by not only increasing the threshold limit of eligibility but also by removing the irritants of payments on reverse charge and inter-state supplies,” said Bipin Sapra, partner, EY. The scheme needs to be made more accessible to other non-restaurant service providers and those that have inter-state business. “Along with increase in threshold, the GST council should also broaden the eligibility criteria by allowing service providers (with possibly a slightly higher rate) and interstate transactions,” said Pratik Jain, leader, indirect taxes, PwC. The council will consider steps to give relief to exporters with thousands of crores in tax refunds stuck in the system and facing acute working capital shortages. The government has already allowed exporters intending to export goods or services without payment of integrated GST with a letter of undertaking barring those persons who have been prosecuted under GST or any other law in force, where the amount of tax evaded exceeds Rs 2.5 crore. A mechanism for swifter refunds as also the release of past ones will be taken up, said an official.
Source: The Economic Times
The export sector’s woes finally seem to have nudged the Centre into action. On Friday, when the GST Council meets to iron out the sector’s problems, three key Union ministers will hold a brainstorming session with officials, exporters and industry bodies to identify measures to lift exports on to a higher growth trajectory. Commerce and Industry Minister Suresh Prabhu, Textiles Minister Smriti Irani and Chemicals & Fertilisers Minister Ananth Kumar will hold talks with representatives from key ministries and departments, including Finance, Heavy Industry and MSME, as well as exporters’ and industry bodies, a government official told BusinessLine. “The inputs from the session will also be used to frame the mid-term review of the Foreign Trade Policy (FTP), which is already delayed. The focus will be on how India can go for a quantum jump in exports,” the official said. Exports have fallen woefully short of the FTP targets announced in April 2015, which projected annual exports of $900 billion by 2020. However, exports have hovered around $300 billion in the last two years. Liquidity challenges after the GST regime kicked in and the rupee’s volatility have made Liquidity challenges after the GST regime kicked in and the rupee’s volatility have made the going tougher for exporters the going exporters. “The Commerce Ministry realises it is time for a course correction in order to move exports to a higher growth trajectory. Not only will steps need to be taken to address the immediate problems, effective schemes have to be devised to increase their competitiveness,” the official said. tougher
New challenge
for With the World Trade Organization declaring earlier this year that India’s per capita Gross National Product (GNP) had exceeded $1,000 for three years in a row (2013, 2012, 2015), the country will now be ineligible for export incentives that only poorer countries are allowed. “The Ministry will have to look at new options together with affected ministries, such as Textiles, in order to ensure that action is not taken against Indian exports by other WTO member countries,” the official said.
Exporter wishlist
Meanwhile, the GST Council is expected to consider some of the requests made by the export sector, which includes exemption from Integrated GST (IGST) on imports of inputs used in exports (under schemes such as Export Promotion Capital Goods and Advance Authorisation); exemption from GST for merchant exporters and wider usage of duty exemption scrips (earned under incentive schemes such as Merchandise Export from India Scheme). “In the meeting with the Centre on increasing exports, we will highlight problems of the export sector, give possible solutions and suggest a strategy to increase exports,” said Ajay Sahai, Director General, and Federation of Indian Export Organisations (FIEO).
Source: Financial Express
With pressure from the Indian industry mounting against removing import tariffs on goods under the proposed Regional Comprehensive Economic Partnership (RCEP) pact, New Delhi has made only “token” improvements in its latest round of offers extended to its 15 partner countries. fresh offer is likely to attract criticism at the next round of negotiations starting October 18 in Seoul from other members including the 10-nation ASEAN, Australia and China which are pressing for greater market access, a government official told BusinessLine. “Representatives from large industrial houses have been meeting Commerce & Industry Minister Suresh Prabhu to voice their unhappiness with the proposed tariff cuts under RCEP. India has therefore made some token improvements in its offers as part of the fresh round of submissions as it sees no scope of further opening up,” the official said. The Indian industry is unhappy with the offers already made by India to its other RCEP partners which also include South Korea, New Zealand and Japan. India had earlier improved its offers by reportedly agreeing to eliminate tariffs on close to 80 per cent products for the ASEAN countries but insisted on deviations for members like China, Australia and New Zealand with which it does not have any existing free trade pacts. On an average the tariff elimination offered by India was around 70-75 per cent, according to various sources privy to the negotiations. “Industrialists who have been meeting the Minister have expressed their deep apprehensions about India’s commitments at RCEP. They are especially concerned about India agreeing to bring down tariffs on products from China with which India already has a gaping trade deficit,” the official said. Industry body CII also highlighted the dangers of indiscriminate opening up of markets under the RCEP at a negotiating round hosted by India in Hyderabad earlier this year. However, most RCEP members want India to improve its offers. In fact, Ramon Lopez, Trade Secretary of the Philippines, which is currently chair of the ASEAN group, said at a press conference following a meeting of Trade Ministers from RCEP countries last month, that the only acceptable re-calibration is a number that is closer to the 90 per cent to 92 per cent and anything lower or higher than that was not acceptable for ASEAN. “Other RCEP countries were hopeful that India would improve its offers before the South Korea negotiating round. While New Delhi has made some improvements, the changes are marginal. The only saving grace is that other members, too, haven’t improved their offers substantially, but their offers were higher to begin with,” the official said. New Delhi has also said that its offers in goods are subject to an over-all balance in the agreement which would include services. Most RCEP members, including the ASEAN, haven’t made substantial offers in services especially in the area of facilitating movement of workers. If approved, the RCEP will be the largest free trade bloc in the world covering about 3.5 billion of the world population and 30 per cent of the gross domestic product.
Source: Business Line
India's textiles and apparel exports, particularly the fibres segment, grew at a healthy rate of 8 per cent in the first quarter of the current financial year 2017-18. Imports, on the other hand, have increased drastically-by 23 per cent, according to the latest quarterly report of Wazir Textile Index, a textiles sector performance update from Wazir Advisors. The financial advisory firm had recently introduced its Wazir Textile Index (WTI) as a barometer to periodically assess the financial performance status of the Indian textiles industry. WTI Sales was calculated to be 113.0 in quarter 1 of FY18. This reflects that consolidated sales of the top 10 selected companies increased by 3 per cent in Q1 FY18 as compared to Q1 FY17. The consolidated sales of the top 10 selected companies was Rs10,122 crore in Q1 FY18 compared to Rs8,961 crore in Q1 FY16. The WTI EBITDA was calculated to be 77.7 in Q1 FY18. Therefore, there was an overall decline of 25 per cent in EBITDA margin in Q1 FY18. The EBITDA factor decreased significantly due to the impact of increase in raw material and employee costs. The consolidated EBITDA margin of top selected companies in Q1 FY18 was 12 per cent, declining from 16.6 per cent in Q1 FY17. The WTI Cost for raw material (RM), manpower and others were 122.2, 130.5 and 112.9 in Q1 FY18. There was a significant increase in raw material prices which resulted in overall costs, while manpower costs increased on the back of increasing labour wages. Consolidated RM cost constituted 54.9 per cent of sales in Q1 FY18, while consolidated manpower costs constituted 9.8 per cent. The impact of the cost increase was visible in the declining EBITDA margin. Slight decline in key economic indicators in Q1 FY18: In Q1 FY18, India's real gross domestic product (GDP) increased from Rs29.40 lakh crore to Rs31.10lakh crore from last year's Q1, growing at a rate of 5.7 per cent. This was a much lower growth than previous year's quarter growth of 7.9 per cent. The average index of industrial production (IIP) for textiles has declined by 2 per cent while the IIP for apparel declined by 3 per cent in Q1 FY18 compared to Q1 FY17. The wholesale price index (WPI) for textiles registered an increase of 3.5 per cent in Q1 FY18, indicating increase in prices. Textile and apparel exports grew healthy in Q1 FY18: The overall textiles and apparel (T&A) exports in Q1 FY18 was US$ 9.5 billion increasing at a healthy rate of 8 per cent over the previous year. Exports of fibres, apparel, home textiles and filament has grown in Q1 FY18 as compared to Q1 FY17. The highest growth was observed in exports of fibres growing at a rate of 48 per cent. Exports of yarn fell by 11 per cent in Q1 FY18. The US and UAE were the largest export markets for India with a cumulative share of ~35 per cent. The share of the UAE increased slightly in Q1 FY18. India's T&A imports increased drastically in Q1 FY18: The overall T&A imports in Q1 FY18 was around US$ 1.7 billion, increasing significantly at a rate of 23 per cent from the previous year. The import growth in Q1 FY18 was primarily attributed to a tremendous increase in fibre imports by 99 per cent over Q1 FY17. However, imports of other major categories like yarn andhome textiles declined significantly. China continues to be the largest import partner for India. The import share of the US has increased significantly from 7 per cent to 13 per cent in Q1 FY18, while that of Bangladesh declined from 10 per cent to 4 per cent. Raw material prices have increased over the last quarter: Overall there was an increase in raw material prices in Q1 FY18 compared to Q1 FY17. On an average basis, raw cotton, viscose staple fibre and polyester staple fibre prices increased by 15 per cent, 10 per cent and 3 per cent respectively in Q1 FY18. Similarly, there was an increase in cotton yarn and polyester viscose blended yarn average prices growing at a rate of 10 per cent and 11 per cent respectively in Q1 FY18. However, polyester cotton blended yarn registered a decline of 9 per cent in the Q1 FY18 compared to Q1 FY17 on an average. Overall, the Indian textiles and apparel mill sector exhibited growth in overall sales during the first quarter of financial year 2017-18. However, there has been tremendous pressure on margins due to increased input factor costs like raw material and manpower resulting in steep decline in EBIDTA levels.
Source: PTI
Garment exporters are facing uncertain future with the government slashing duty drawback to two per cent from 7.5 per cent with effect from October 1. The decision has hit exporters hard as they were gearing up to start booking orders for the peak season. Ashok G Rajani, Chairman, Apparel Export Promotion Council, told BusinessLine that the government has slashed the drawback on the pretext of GST but there are lots of taxes in the textile industry which are not covered under GST. For instance, he said, there is no GST when cotton is sold to the yarn manufacturer. Similarly, the industry pays about six per cent embedded tax which is not covered under GST. “The government cannot expect the industry to export our tax to other countries and still remain competitive in the global market. We have made a representation to the government to retain the drawback at the earlier level. Or else we will see a sharp fall in exports this fiscal,” he said. Apparel export has been stagnating for the last few months due to intense competition from Bangladesh and Vietnam. In fact, garment export from Sri Lanka is gaining ground after it was accorded the preferential treatment to tap European market duty free. Indian exporters pay 10 per cent duty to tap markets in Europe. India’s apparel exports to the US, the single largest market for India, have increased just 0.21 per cent between January and July to $2.33 billion. In contrast, exports from Vietnam to the US were up over 6 per cent at $6.52 billion during the same period. A Sakthivel, Regional Chairman, Federation of Indian Export Organisations (Southern Region), said the industry has requested the government to continue with duty drawback and Rebate of State Levies scheme till it puts up the system for smooth reimbursement of iGST (integrated Goods & Services Tax). The industry is facing huge funding problems with blockage of working capital due to delay in refunds. “We have also appealed to the government to enhance the reimbursement of state taxes paid by exporters to 5.5 per cent (against 2-4 per cent offered now). If the government does not take a decision within a month, garments exports will fall drastically this fiscal,” he added.
Source: Business Line
Ahead of the GST Council’s meeting on October 6, the Apparel Export Promotion Council (AEPC) has urged the Indian government to address the refund of embedded taxes on exports. These taxes include the levies on cotton, electricity, and input tax credit restrictions for man-made fibres used in textiles and purchases made from unregistered dealers. As per an industry representation, Middle East, South Asian and African countries have emerged as a significant market for Indian readymade garments and since lot of orders were already booked before the introduction of GST, the curtailment in duty drawback will adversely affect the exports. The industry has also requested for the reinstatement of the scope of transaction for Merchandise Exports from India Scheme (MEIS) scrip to facilitate the exporters to make payments of necessary duties and taxes through the scrip transactions as was permitted prior to GST regime. “In the absence of encouraging drawback rates, exports will further witness a sharp decline just ahead of the peak festival season when the industry was expecting a recovery. It is our humble submission to the concerned ministries to review the issue of embedded taxes and allow its refund through the drawback route,” said AEPC chairman Ashok G Rajani. “Apparel exporters have already been hit hard by an appreciating rupee and the non-refund of embedded taxes have put a tremendous pressure on their working capital. The instance of new levies like intra company stock transfers, GST on job work, etc imposed in the GST regime have led to cost escalation for exporters in this transitory phase. So, it is requested that the government look at ways to addresses the issue of reimbursement of embedded taxes presently not reimbursed under rebate of state levies and (duty) drawback schemes which would provide a respite to the industry,” Rajani added. “Garment Industry is among the largest job providers in the country and in order to remain competitive in the global market among the prevailing headwinds, it is important that the government keeps a sympathetic view towards the demands of the industry and refunds un-subsumed taxes,” he further added. AEPC has been in constant consultation with the commerce and textile ministries along with Niti Aaayog on the issue of restoration of old duty drawback rates. The council has made a presentation to Amitabh Kant, CEO, Niti Aayog apprising him about the various issues which the garment industry is currently grappling with. Earlier this week, The Cotton Textiles Export Promotion Council (TEXPROCIL) chairman Ujwal Lahoti also urged the government to address the issue of embedded Central and state levies, which have not been subsumed under the GST regime. Addressing the council’s annual general meeting in Mumbai, he said the inordinate delay in the refund of GST on exports and bond or letter of undertaking (LUT) for merchant exporters needs to be addressed. “Trade is now witnessing a paradigm shift from an ‘exemption regime’ to a ‘refund regime’ in claiming export benefits, thereby leading to working capital and liquidity crunch.” (RKS)
Source: Fibre2Fashion
Chandigarh: The Cotton Corporation of India (CCI) has assured the Punjab government that it will start procurement of crop in the state for the year 2017-18 within a week. The assurance was given by CCI officials to the Additional Chief Secretary (Development) M P Singh during a joint meeting held here last evening between officials of CCI, Agriculture Department and Mandi Board, an official spokesperson said here today. The spokesperson said that the officials also discussed the issue of sale of cotton below the Minimum Support Price (MSP), in addition to the purchase to be made by CCI, at the meeting chaired by ACS (Development). The chief minister is personally monitoring the cotton procurement process and has directed the Deputy Commissioners of the cotton-producing districts to ensure that the farmers get remunerative prices of their produce, the spokesperson said. The chief minister has instructed senior officials of the concerned departments to regularly monitor the progress of ongoing procurement of the cotton crop, he said. The chief minister has also directed the Punjab Mandi Board officials to ensure that the farmers get price of cotton as per its quality and gradation, he said. The directives followed a review meeting chaired by the chief minister a few days ago to assess the progress with respect to cotton procurement, he said. The review meeting had been attended by senior officers of the state government, besides officials of the Agriculture Department as well as the Mandi Board. PTI VSD MKJ
Source: Business World
Mahbubnagar: The heavy downpour in the past one week in Mahbubnagar and surrounding areas has washed away the hopes of cotton and paddy farmers in the district. Among all the 26 mandals in the district, the farmers in Jadcherla, Balanagar and Rajapur mandals had to face the fury of the rain as more than 40,000 acres of cotton and paddy withered due to untimely rains. The Jadcherla mandal alone recorded more than 7.7mm rainfall inundating all the ‘nalas’ and filling up the empty tanks in and around the constituency. As per the latest statistical estimates by the Agriculture department, more than 29,000 acres of cotton has been spoiled due to the heavy downpour in Jadcherla mandal alone. In addition to this, an area of 11,000 acres of paddy was also drowned due to incessant rains. Pouring his woes, Kondaiah of Nagasala village from Jadcherla mandal said, “I had sown cotton over an extent of six acres investing more than Rs 20, 000 per acre. They have grown well and I was about to harvest it in a day or two. But the sudden rains have dashed all my hopes. I have lost the entire crop to rains. The heavy downpour has drenched the cotton buds and flowers. The wetness will turn the cotton black, which will not fetch good price in the market.” Another farmer Mallesh of Lingampet in Rajapur mandal also expressed similar views. He too lost his four-acre cotton crop to the heavy downpour incurring a loss of more than Rs 80,000. This year though the rains were very good in the beginning and helped to sow cotton, jowar, maize and other dry crops like pulses, rains in the later part slowed down with almost a month’s dry spell. This turned doom to the maize farmers, as the crop could not get adequate rains during its pulping stage. Now, again when the cotton crop was yielding good and was about to be harvested, the rains dashed the hopes of cotton farmers causing them huge loss. “This year cotton farmers were expecting very good yield. However, the untimely rains have dashed their hopes. We are estimating the exact area of crop damage in the district. Very soon, we will submit a report to the government and accordingly, the government will take a decision on the payment of compensation to the farmers,” informed Nirmala, Assistant Director Agriculture, Jadcherla Division. However, the Agriculture officer advised the farmers to protect their crop from pests, as this season was more prone to affect the paddy and cotton crops. “Farmers should not lose hope, even though the first cotton yield may have been spoiled due to rains, the farmers must use fertilisers and good pesticides and protect their crop. If not in the first yield, the cotton buds will give a good crop in the second and subsequent yields,” observed the officer.
Source: The Hans India
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 55.23 per barrel (bbl) on 5.10.2017. This was higher than the price of US$ 54.60 per bbl on previous publishing day of 4.10.2017. In rupee terms, the price of Indian Basket increased to Rs. 3599.47 per bbl on 5.10.2017 as compared to Rs. 3564.88 per bbl on 4.10.2017. Rupee closed stronger at Rs. 65.18 per US$ on 5.10.2017 as compared to 65.29 per US$ on 4.10.2017. The table below gives details in this regard:
|
Particulars |
Unit |
Price on October 5, 2017 (Previous trading day i.e. 4.10.2017) |
|
Crude Oil (Indian Basket) |
($/bbl) |
55.23 (54.60) |
|
(Rs/bbl) |
3599.47 (3564.88) |
|
|
Exchange Rate |
(Rs/$) |
65.18 (65.29) |
Source: PIB
WASHINGTON: The US trade deficit narrowed to $42.4 billion in August, the lowest in 11 months. The Commerce Department said Thursday that the trade gap _ the difference between exports and imports _ fell in August, from $43.6 billion in July. Exports were $195.3 billion, up from $194.5 billion in July and most since December 2014 on higher shipments of cars, telecommunications equipment and pharmaceuticals. Imports slid to $237.7 billion from July's $238.1 billion. The monthly deficit in goods rose 26 per cent with Mexico to $6.2 billion, and 4 per cent with China to $34.9 billion. US exporters are benefiting from an improving global economy and a weaker dollar, which makes American exports less expensive.
Source: US Today
HÀ NỘI — The Việt Nam Textile and Apparel Association (VITAS) yesterday proposed that the regional minimum wage (covering four regions in the country) not be increased next year. A 6.5 per cent increase in the regional minimum wage for 2018 had been decided in August this year by the National Wage Council and submitted to the Government for final approval. Amounting to an increase of VNĐ180,000-230,000 (US$8-10) a month, it was said to be the lowest wage increase ever in the country. However, at a conference on the effects of wage and social insurance policies on textile enterprises in Hà Nội yesterday, VITAS proposed that there be no increase in the minimum wage in the next one or two years, since several enterprises are already struggling with wage increases in the last decade. In the 2007-2017 period, minimum wage in domestic enterprises increased by 21.8 per cent, leading many enterprises to reduce workers’ bonuses every year and use machines instead of labourers, said VITAS. Trương Văn Cẩm, vice chairman of VITAS, said that increasing the regional minimum wage does not ensure increases in workers’ living standards because “wage increases often drag along increases in commodity prices and increases in the cost-of-living. “Moreover, constantly increasing minimum wage reduces competition and shifts the labour structure, preventing enterprises from expanding production and robbing labourers of job opportunities,” he said. Social insurance premiums also increase when minimum wages increase. For the Hưng Yên Garments Corporation with 15,000 workers, the increase in social insurance premiums would go up by VNĐ18 billion ($792,000) per year, said Chairman Nguyễn Xuân Dương. “Five out of our 14 member enterprises are already struggling. It will be hard for us to stay in business if the minimum wage keeps increasing.” Dương said. “In fact, several textile enterprises in our Hưng Yên Province have closed down.” Apart from the minimum wage, VITAS has also proposed that adjustments be made soon to address what it seems as drawbacks in Labour Code 2012, which covers overtime, severance pay, unemployment benefits, health and occupational safety and labour discipline.
Source: Viet Nam News
The Ministry of Industry and Trade will launch the second textile city in Badr city on an area of 1 million sqm, according to the Minister Tarek Kabil. Kabil said that the city includes 198 plots of land including textile, garment and dyeing industries. Kabil added that the booklet of conditions will be withdrawn from the Industrial Development Authority (IDA) during the period from 15 October to 19 October. The minister noted that procedures of the first Textile City, which was launched in the city of Badr in March on an area of one million sqm had been completed. Further, a public draw on units (lands) will be held on 11October. Kabil pointed out that the IDA will also launch an industrial cluster for textile industries in Badr city before the end of the current year to meet the needs of small investors.
Source: Daily News
With the supply of textiles from Uzbekistan to Russia increasing by 22 percent in 2017, both countries Russia and Uzbekistan aims to further expand cooperation in textile industry which is a strategic centerpiece of the Uzbek economy due to the fact that Uzbekistan is the world’s sixth-largest cotton-growing country producing about 1.1 million tons of cotton fiber annually. Russia and Uzbekistan intends to create a “green corridor” for the supply of textile products. Uzbek Foreign Trade Minister Eler Ganiev said that such a proposal was put forward during negotiations with the Russian delegation led by the Minister of Industry and Trade Denis Manturov in a narrow format. According to Ganiev, the potential is very large here. They are talking about production cooperation, the use of Uzbek yarn for production at Russian enterprises, the supply of finished textile products, knitted fabrics as well as cotton fabrics. They expect that by the next year, the volume of trade in textile products could reach about $700 million. On the other hand, Uzbekistan registered a significant growth of almost 34 percent in supplies of rolled ferrous metals and products made of ferrous metals from Russia. All this creates opportunities for expansion and increase in production volumes both in Russia and in Uzbekistan, according to the Foreign Trade Minister. There are 961 enterprises in Uzbekistan with participation of Russian capital and 569 enterprises created with participation of investors from Uzbekistan in Russia. By the end of the year the republic intends to reach the $5 billion trade turnover level with Russia. Moreover, this year Russia has come out on top among Uzbekistan’s foreign trade partners. The production cooperation can make the most serious contribution to the development of bilateral trade relations.
Source: YarnsandFibers
Seiko Epson will invest 16 billion yen in a new building in the campus, in Hirooka office in Japan. The new building, which will house a factory for prototyping and volume-producing large commercial and industrial printing systems and a test laboratory for digital textile printing, is part of Epson's mid-term plans to grow its printing solutions business. The new building that will be named Innovation Center Building B will have a total floor area of 37,650 sq m. The first floor will house the factory and test laboratory, while the second and third floors will be office area. "The construction work is scheduled to begin in the summer of 2018 and operations are expected to begin in around March 2020. Epson expects the new building to yield benefits by reinforcing its research and development capabilities and production technology in the commercial and industrial printing domain. The company also expects to benefit from greater operational efficiency by bringing all relevant departments under the same roof," the company said in a press release. As an R&D and production centre for core devices used in the printing solutions business and as an inkjet printer planning and design centre, the Hirooka office works closely with Epson's production sites worldwide. Epson already has under construction at the Hirooka Office a new factory that will produce the company's state-of-the-art .PrecisionCore printheads. That factory is scheduled to be completed in the first half of 2018. Epson is constructing the Innovation Center Building B in response to the expansion of key markets. Epson is also in the process of expanding and upgrading its lineup of printers that deliver spectacular image quality for things such as indoor/ outdoor sign boards. In the digital textile printing market, Epson anticipates rapid expansion because, in addition to having a comparatively low environmental impact, digital systems offer print shops the ability to handle short-run print jobs at low cost and with a fast turnaround. The Japan-based company is committed to advancing its original technologies and to delighting customers by exceeding their expectations with products and services based on original core devices.
Source: Fibre2Fashion
Buyers from more than 25 countries will be visiting Intex South Asia 2017, the largest and only fair in South Asia specifically designed to synergise the garmenting needs of international brands with the manufacturing strength of South Asia, satisfying both exports and large domestic markets. The show will take place during November 15-17, 2017 in Colombo. On the back of highly successful shows in 2015 and 2016, Intex South Asia 2017, will be 60 per cent bigger than 2016 and will showcase around 250 exhibitors from 15 countries. Intex South Asia is the largest and only international sourcing textile show in South Asia region connecting global exhibitors from India, Pakistan, Bangladesh, Sri Lanka, China, Korea, Taiwan, Hong Kong and more, to buyers from across the South Asia region and other international markets. South Asia is the world’s premier garment export hub. Recognising this, the World Bank has stated that South Asia is best placed to attract garment and textile businesses with its lower wages and its demographic advantage of having the largest youth population (487 million) in the world. The South Asian textile industry is a powerhouse on a global scale. It plays a critical role in the global textile industrial chain, accounting for 12 per cent of global exports. Understanding the growing importance and potential of this region, Intex South Asia was created to help manufacturers and buyers take advantage of the opportunities developing in the region. South Asian countries have their own strengths which make them leaders in their focus zones. India has made significant strides in developing backward links to the textile industry with its missions on cotton and technical textiles. Pakistan is making progress towards integrating its textile and apparel sectors and retains expertise and strong focus in cotton products. Bangladesh with its focus on low-value and mid-market price segment apparel, is slowly but surely moving towards value addition. Sri Lanka has progressed the fastest in moving up the value chain in the region with producers progressing into design and retail, launching their own international brands like Avirate and Amante. Other upcoming Sri Lankan brands are also consolidating themselves in the domestic retail sector while endeavouring towards showcasing their brands on the international stage. Sri Lanka plays a pivotal role for intra-regional integration due to its politically neutral status in the South Asian region, creating a positive business environment for entrepreneurs from Sri Lanka, India, Pakistan and Bangladesh to meet and do business together. Thus making Sri Lanka the gateway to the huge South Asian market. However, for the South Asian region as a whole to progress and take its position as the premier manufacturing hub in the world, the countries need to come together and combine their strengths to overcome individual weaknesses. This is exactly what Intex South Asia will construct, with top companies from across the region joining hands and creating stronger business ties under one roof at Intex South Asia in Colombo, Sri Lanka. Sri Lankan industry has received a tremendous boost with the awarding of GSP-Plus. Sri Lankan exporters would once again be able to export over 6,000 products duty free to the European Union (EU) countries. The additional tariff advantage will greatly strengthen Sri Lankan exports in apparel, textiles, etc. The additional tariff concession gained by the apparel categories, for example, will see duties cut from 9.6 per cent to zero, thus benefitting the industry greatly under GSP Plus. It is expected that more EU customers would now change their sourcing strategy (which currently is tilted towards duty free countries like Bangladesh and Cambodia) in favour of Sri Lanka. Regaining the GSP Plus facility is expected to give a major boost to Sri Lanka’s apparel exports which comprises 61 per cent of total exports to the EU. This additional reduction of tariffs under GSP Plus is estimated to be valued at around US$ 60 million. Apparel exporters anticipate a 10-15 per cent boost in export earnings in 12 months following regaining of GSP Plus, and will particularly accrue to the smaller players. Today, Sri Lanka's growth, its excellent reputation for manufacturing, value addition and ethics is attracting manufacturers and investors from across the globe. Sri Lanka’s excellent design-to-delivery solution means that the design, manufacturing and logistics are all carried out in Sri Lanka. The country has also created excellent international goodwill due to its speed and productivity in the fast fashion landscape. Sri Lanka is situated at a nerve centre for shipping with 24 per cent of the world container traffic from East to West moving though the Colombo port area. Besides these positives, Sri Lanka is also transforming into a regional business hub attracting international interest as being the optimum location to conduct business with all South Asian countries in one central location. It has all the advantages to be developed as the economic hub of South Asia. Arti Bhagat, director, Worldex India, organisers of Intex South Asia said, “Intex South Asia has always focused on bringing sectorally relevant, high quality exhibitors to the show. This is especially important considering Sri Lanka has been awarded the GSP Plus. A significant feature of the GSP Plus scheme is the fact that countries can make use of ‘regional cumulation’ to benefit from Rules of Origin (ROOs) when local sourcing for product input is not possible. Regional cumulation creates stronger regional co-operation between countries which are members of an EU recognised regional grouping like SAARC in South Asia and also countries which are GSP beneficiaries. Intex South Asia is the perfect platform for Sri Lankan exporters to take advantage of regional cumulation via intra-regional trade and make the most of GSP Plus.” (SV)
Source: Fibre2Fashion
INTERNATIONAL - Cambodia agreed on Thursday to raise the minimum monthly wage of workers in its crucial textiles and footwear industry by 11% to $170 from next year. The sector generates $7bn annually for the economy, and garment workers are in the spotlight ahead of a general election in 2018. Prime Minister Hun Sen Hun Sen, who has ruled the country for more than three decades, has met with garment workers almost every day in recent weeks, taking selfies with them and having lunch. Garment workers have clashed with police in recent years and some unions representing disgruntled employees have joined opposition supporters protesting Hun Sen's government. Wages for garment workers have increased over 150 percent over the past five years from $61 per month in 2012 to the current $153. The country has had to tackle the challenge of competitiveness, with some arguing that the wage increases have made Cambodia less appealing for some firms. The garment industry employs an estimated 700,000 workers in Cambodia, helping to sustain rural livelihoods in one of the world's poorest countries. Government representatives, factories and unions backed the latest increase. Hun Sen "always pays attention to the welfare and livelihood of the workers," a statement from the Ministry of Labor and Vocational Training on Thursday said. The ministry said that new wage will come into effect on Jan. 1, 2018. It also said that the government will continue to delay taxing profits in the textiles sector and eliminate export management fees. Pav Sina, president of the Collective Union Movement of Workers, said unions were happy with the hike. "The prime minister always adds it every year, this is appropriate to what we tried to achieve," Pav Sina said, while adding that higher wages would not make Cambodia less competitive. But Kaing Monika, deputy secretary general for the Garment Manufacturers Association in Cambodia, said the new minimum wage was "beyond the affordability of some of our members and the competitive level of the country".
Source: REUTERS
