The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 16 NOV, 2017

NATIONAL

INTERNATIONAL

GSTN utility for exporters to claim refunds to go live tonight

Merchant exporters can start claiming tax refunds using the new utility that will be activated on the GST Network portal tonight, GSTN CEO Prakash Kumar said. With the new utility RFD-1A, a merchant exporter can claim refund of GST paid at the time of buying goods which he has exported in the relevant month. “GST RFD-1A for refund of input tax credit on export of goods and services and additional amount in cash ledger would go live on GSTN portal tonight,” Kumar told PTI. The refund claims can be filled for July-September and that would be matched with the corresponding GSTR-3B filed by the exporter. Earlier, GSTN had launched the utility for processing refund claims by manufacturing exporters who had paid Integrated GST (IGST) while exporting goods. Kumar further said a new functionality has been introduced on the portal that enables businesses to engage and disengage a GST Practitioner (GSTP). As many as 46,000 people have applied for enrolling themselves as GST Practitioner and central tax officers are in the process of validating their applications. “The list of practitioners would be put up on the GSTN portal and businesses can search for a GSTP in their locality and send request. The practitioner can then decide to accept it or reject,” Kumar said. He added that once the business appoints a practitioner, any communication sent to the taxpayer would be automatically sent to the authorised GSTP as well. Besides, GSTN has come out with form REG-09 for registration of non-resident taxable persons who engage in supply of goods or services occasionally, but have no fixed place of business in India. All foreign exhibitors participating in fairs like IITF who also want to sell their goods are required to register as non-resident taxpayer, Kumar said.

Source: Financial Express

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More GST good news coming: CEA Arvind Subramanian hints at fewer slabs, greater number of items

Chief economic adviser (CEA) Arvind Subramanian on Wednesday hinted at further rationalisation of the five-tier goods and services tax (GST) structure and said the GST Council’s decision last week to prune substantially the list of items under the highest rate bracket won’t affect the Centre’s fiscal position much. The rate cuts will also have a salutary impact on retail inflation, said Subramanian. “I haven’t done any calculations but some estimates suggest a reduction (in CPI inflation) of 20-40 basis points, and that sounds plausible,” the chief economic adviser told CNBC TV-18. Retail inflation touched a seven-month high of 3.58% in October. Fewer slabs, bringing more items under the GST structure and further simplifications are going to be considered by the GST Council in the coming months. While land and realty would be brought into the GST ambit first, electricity and even petroleum products could be considered next for inclusion.Last week, the GST Council decided to move 178 items out of the total 227 goods and services in the top 28% bracket to the standard 18% rate slab. It also agreed on levying only a 5% GST on eating at restaurants, other than the five-star hotels, from November 15. While the rate cuts are expected to cost the exchequer some `20,000 crore a year, Subramanian said lower taxes would lead to greater compliance and wider taxpayer base, which will offset any fiscal impact of the move and, in fact, yield rich dividends in the long run. He said it’s too early to have an accurate assessment of whether the centre’s fiscal deficit will worsen from the targeted 3.2% for 2017-18. Computing a revenue neutral GST rate (RNR) of 15-15.5%, a panel headed by Subramanian had earlier said a lower rate of 12% and a standard rate of 18% will have negligible retail inflation impact while a higher RNR (on a lower base) with merit rate of 12% and standard rate of 22% would have a significant 0.3-0.7% impact on inflation. On cement still attracting the highest 28% GST, Subramanian said it was a big contributor to tax revenue and that the GST Council could soon take a call on this issue. Asked about the fall in exports in October for the first time since August last year, Subramanian said while initial disruptions caused by the GST system (delay in refunds to exporters) might have weighed on outbound shipments, other factors like the general state of the economy, the exchange rate and the twin balance sheet problem (over-leveraged companies and bad loan-encumbered banks) could also have played a role too. He said the government has already taken measures to soften the GST impact on exporters. The government has assured faster refunds and relaxed certain guidelines, including allowing exporters to supply items on the basis of a letter of undertaking instead of having to furnish a bond and a bank guarantee. He also said non-oil exports growth of around 9% (seasonally-adjusted) in recent months, excluding October, is much better than the minuscule growth in much of last year. Commenting on bond yields that touched a 14-month high on Wednesday, Subramanian said rising oil prices, higher US treasury yields and the direction of the domestic monetary policy are among the factors weighing on the bond market. The yield on the benchmark 1-year notes crossed 7% on Tuesday.

Source: Financial Express

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Now, no GST payments on advances received for supplying goods

New Delhi: The central government on Wednesday exempted businesses from paying goods and services tax (GST) on advances received for supplying goods in the future. The move would spare industry liquidity pain, confusion over tax liability on supplies that are yet to be made and help repair the disruption caused in the supply chain. The exemption by the Union government on paying GST at the time of receipt of advances is in line with the decision of the GST Council. State governments are in the process of notifying similar exemptions under state GST laws. The centre’s notification specified that businesses need to pay central GST (CGST) on supply of goods only at the time of supply. Experts described the decision as a big concession by the authorities to support taxpayers. “It is a very significant relief, which industry was looking forward to. Under the earlier value-added tax (VAT) regime, there was no tax on advances for goods but was introduced under GST. Since the input credit was only available after receipt of goods, this led to working capital blockage for industry,” said Pratik Jain, partner and leader of indirect taxes, PwC India. For services, GST continues to be payable in advance in line with the provisions under erstwhile service tax laws, said Jain. Small businesses, which pay taxes and file returns on a quarterly basis, were exempted from the requirement of paying GST on advances earlier. The same benefit is now available to all businesses. “This (the exemption) comes as a huge sigh of relief for businesses both in terms of compliances as well as working capital loss,” said Abhishek Jain, tax partner, EY India. The central government issued a host of notifications on Wednesday, bringing into force decisions made by the GST Council last Friday at its 23rd meeting in Guwahati. The federal indirect tax body decided to make major tax cuts, including by shifting 177 items from the highest slab of 28% to the 18% slab. It also decided to lower the tax rate on 54 other items. The top tax rate of 28% is now restricted to luxury and demerit goods like pan masala, aerated water and beverages, cigars and cigarettes, tobacco products, cement, paints, perfumes, air-conditioners, dish washing machines, washing machines, refrigerators, vacuum cleaners, cars and two-wheelers, and aircraft and yachts. The council also decided to cut the tax rate for restaurants, other than those housed in five-star hotels charging Rs7,500 tariff, to a flat 5% without tax credits from 15 November. Earlier, air-conditioned restaurants were taxed at 18% and non-air-conditioned ones were taxed at 12%.Finance minister Arun Jaitley on Monday signalled more GST rate cuts and appealed to businesses to pass on the benefit of the recent reductions to consumers. “The tax rate rationalization process will always continue. Already, you have a situation today where every taxpayer can say that he has a bigger market and more reasonable tax rates,” he said. Jaitley, however, qualified that the GST rate cuts will be presaged on revenue collections and then went on to point out that the tax burden on most items at present is less than what it used to be.

Source: Financial Express

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Handloom artisans seek  complete waiver of GST

Notwithstanding the reduction of GST on the handloom and  handicraft sector  discontent artisans has sought complete waiver  waiver of tax on such products.  Handloom and handicraft  artisans today participated in a  seminar here organised by the  Crafts Council of India on GST  and demanded withdrawal of the  new tax.  “We will take a resolution  after the seminar based on the  demands from the artisans and  will send a representation to the  GST Council  ” Crafts Council  President Kasturi Gupta Menon said.  The GST Council  it its 23rd meeting on November 10  had cut  tax rate on most handloom and handicraft products  except khadi  to  12 per cent  reports PTI.  Khadi has been exempted from GST  an artisans’ body official  said. The GST rate on these products before the revision varied  between 18 per cent and 28 per cent.  There are around nine crore weavers and artisans in the  country  and most of them have been affected due to the GST  the  official said.  Handloom and handicraft  products were exempted in the  previous value-added tax regime.  “Already more than 50 per  cent of weavers have switched  their profession to running  rickshaws (including batteryoperated  rickshaws) for survival  in Shantipur in Hoogly district  ”  an artisan claimed.  Former Central Board of  Excise and Customs chairman Sumit Dutt Majumdar said the Guwahati  meeting had attempted to correct some flaws affecting the sector.

Source : Tecoya Trend

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Liquidity to pay GST is the reason for fall of Exports : FIEO President

NEW DELHI: Mr Ganesh Kumar Gupta, President, Federation of Indian Export Organisations (FIEO) while reacting to the export data for the month of October, 2017, said that the fall was expected as exporters particularly MSME were facing liquidity problem to pay GST for four months in a row without getting any refund. Mr Gupta said that there is immediate need for remedial measures to prevent further decline in exports otherwise the situation may be worse for November, 2017. Implementation of the measures approved by GST Council is not taking place as a result challenges faced by the exporters remain the same, added FIEO Chief. There is sharp fall in major labour-intensive sectors like Leather & Leather products, Gems & Jewellery, Handicrafts, Readymade garments, Carpets etc. The decline in these highly employment-intensive sectors is a worrisome sign observed FIEO President. The exports figure for the month of October, 2017, for the first time after 13 months in a row, have shown negative growth of 1.12 percent said Mr Ganesh Kumar Gupta as still 18 out of 30 major product groups, were in positive territory. Mr Ganesh Kumar Gupta, however said that WTO’s latest World Trade Outlook Indicator (WTOI) also suggests that global merchandise trade growth will likely moderate in the fourth quarter of 2017. FIEO President further added that exports should be out rightly kept out of the purview of GST as paying the tax first and getting refund is cumbersome, complex and complicated affecting exports.

Source: Daily Shipping

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Govt finds 130,000 firms without PAN

An investigation conducted by the Ministry of Corporate Affairs (MCA) has revealed more than 130,000 companies, out of 224,000 taken off registers, did not have a permanent account number (PAN) even as they transacted crores of rupees.  Sources said the probe indicated only 93,000 firms struck off by the Registrar of Companies (RoC) had PAN, which is mandatory for any transaction above Rs 50,000.  The findings showed these firms did not pay taxes and made it difficult for the authorities to track their transactions, sources said. The absence of statutory filings was cited as a reason for deregistering the firms.  It is learnt that the Ministry of Corporate Affairs is now likely to examine whether all active companies have PAN or not. After the recent rounds of deregistration by RoC, 1.13 million companies remain active. The PAN issue adds to the concerns of the ministry over many banks failing to submit post-demonetisation transaction details of companies which were deregistered recently.  State Bank of India (SBI), for instance, has not provided the ministry with the transaction details of companies struck off the registers, sources said. A query sent to SBI on this matter remained unanswered. The government crackdown on shell companies has not stopped with deregistering 224,000 companies and disqualifying their directors. The MCA is probing 809 listed companies which are not traceable by the Securities and Exchange Board of India (Sebi), sources said. While 300,000 directors associated with the struck-off companies have already been disqualified, the number could cross 450,000 as the crackdown continues. Around 100 disqualified directors have appealed against the government’s decision in various high courts. Also, some 70-odd companies have appealed against being deregistered. In a separate development, there was a 300 per cent jump in the number of applications for PAN post-demonetisation.   Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra had said while there were around 250,000 PAN applications per month earlier, the number rose to 750,000 after the Centre announced scrapping of high-value currency notes last November.   The ministry has also found discrepancies in the data provided by many banks. Analysis of details sent by 13 banks reveals that about Rs 4,500 crore was deposited and withdrawn post-demonetisation. In fact, there are companies with over 100 bank accounts. One of the companies had 2,134 accounts.  There were several companies with zero balance as on November 8, 2016, when demonetisation was announced, but some of them deposited funds running into crores of rupees after note ban. In fact, there were transactions by these companies even after their names were struck off. The surveillance of shell companies could intensify with their real estate coming under the scanner. The firms could be debarred from selling and transferring such properties. The ministry has asked state governments to identify properties owned by shell companies and put them in the custody of the district collectors concerned.  While several chartered accountants suspected to be involved with the struck off companies came under scrutiny too, nothing has been found against them yet.  The decision to deregister companies was taken under a special drive by a  task force formed by the Prime Minister’s Office. The task force is working with other enforcement agencies and is jointly chaired by the revenue secretary and the corporate affairs secretary

Source: Business Standard

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Daily wagers stall textile parcel delivery, want double wages

Surat: The daily wagers lifting textile goods parcels in the textile markets on Ring Road have threatened to stop the loading and unloading, seeking a hike in daily wages starting November 17. The Textile Kamdar Union has stated that the traders agreeing to the wage hike will be spared, while the daily wagers will not lift the parcels of those who oppose the hike. The delivery of textile parcels in many textile markets have come to a standstill after the workers going on an indefinite strike. A meeting was held on Wednesday between Textile Kamdar Union and the Federation of Surat Textile Traders Association (FOSTTA). The FOSTTA has agreed to send official letters to all the market associations regarding the wage hike. Meanwhile, there are stacks of textile goods dumped in the markets after the daily wagers have joined the strike. The Textile Kamdar Union announced strike in four markets, including Millennium, Abhishek, Shiv Shakti and Annapurna, after the traders refused to hike the wages from Rs 60 per parcel to Rs 120 per parcel on Saturday. The workers have been demanding hike in the lifting charges of parcels from the last many days and that most of the transporters godown shifting to far away places due to the traffic congestion in the city areas.
President of the Kamdar union, Shaan Khan said, "The demand of workers is genuine. They have to carry the parcel on their shoulders all the way from the markets to load on the tempo and then again unload at the transport godowns. Each parcel weighs between 50 kg to 60 kg. The workers are doing a tedious work." Khan added, "We have given letters to all the market associations of the 165 markets in the city regarding the wage hike of the parcels at Rs 120 per parcel. However, many markets are not willing to accept our demand. If the demands will not be met, not a single parcel will be lifted from the markets"

Source: Times of India

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Apparel Exporters Seek Pre-GST Drawback as Immediate Relief

India's apparel exports declined 39 per cent in value terms in October. Under drawback, exporters get the reimbursement of duties they have paid on the imported items used in the finished good. Apparel exporters on Wednesday demanded that the duty reimbursement to garment exporters be retained at pre-GST drawback rate of 7.5 per cent as an immediate relief to them amid declining outbound shipments. In the wake of dwindling apparel exports, AEPC in a statement said that it has been engaging with the policy makers for an early resolution of the issue which is hampering the apparel industry, post GST roll out. Chairman of Apparel Exports Promotion Council (AEPC) Ashok Rajani on Wednesday called on Chief Economic Advisor Arvind Subramanian to apprise him about the difficulties faced by garment exporters. The apparel export industry has been "severely handicapped" by the sharp reductions in the effective drawback and rebate on state levies (RoSL) rates. The drawback mechanism prior to the GST reimbursed both the customs duties and domestic taxes like central excise and service tax. "The important point is the principle of reimbursement of domestic non-GST and GST central taxes in addition to customs through the drawback mechanism," he said. This, however requires an amendment in the drawback rules to provide for reimbursement of GST duties. "We therefore urged Subramanian that pending these legislative changes, the total duty reimbursements to the apparel sector be retained at pre-GST stage of 7.5 per cent drawback without input tax credits, plus 3.5 per cent of RoSL (rebate on state levies)," Rajani said. The pre-existing levels of reimbursement through the drawback and the RoSL routes should be maintained upto 31 March, 2018 to provide immediate relief to the reeling apparel sector, he added. AEPC is the official body of apparel exporters in India that provides invaluable assistance to Indian exporters as well as importers/ international buyers who choose India as their preferred sourcing destination for garments.

Source: PTI

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Garment exports dive 41% in October on GST woes

COIMBATORE: With readymade garment exports plunging 40.7% on a year-on-year (yoy) basis to Rs 5,398 crore in October, exporters have blamed the slump on financial crunch due to the delay in getting GST refunds and reduction in duty drawback rates under the new regime. The fall is one of the highest in percentage terms. Garment exports was the worst performing export category in October, data with the union commerce ministry showed. Garment exports fell 39.2% y-o-y in dollar terms to $829.4 million during the month. "GST is the main reason for the fall in exports," said Raja M Shanmugham, president, Tirupur Exporters' Association (TEA). "Order bookings didn't happen because of the ambiguities relating to GST," he said. "We are in a disadvantageous position against our competitors. GST would impact our profit margins by 5-6%," Shanmugham stated. Though exports declined between June and August, the drop was not quite big. "Exporters could not take advantage of positive trend in global trade due to serious cash crunch," said A Sakthivel, regional chairman, Federation of Indian Export Organisations (FIEO), southern region. Refund claims could not be settled due to system-related issues including the need for matching various heads of different returns in a majority of the cases, he said referring to the difficulties faced by the exporters in getting GST refunds for tax paid on exports during July and August. The duty drawback for cotton 'T-shirts' was reduced from 7.7% to 2% with the ceiling per piece being brought down from Rs 36 to Rs 9 with effect from October 1. With the advent of GST, exporters can claim drawback only for levy of customs. Though exporters can claim input tax credit for excise duties and service tax under GST, the refunds would be minuscule, industry officials said. Incidentally, readymade garment exports increased 4.5% y-o-y in rupee terms to Rs 59120.7 crore in the first half (H1or April-September) of 2017-18. Exports gained 8.9% y-o-y in dollar terms to $9.2 billion during H1 of 2017-18.

Source: The Times of India

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Exporters Lose Ground As GST Holds Up Working Capital

Indian exporters are struggling to pick up new orders, after the implementation of Goods and Services Tax led to a shortage of working capital for them. “The labour intensive sectors like garment, handicraft, gem and jewellery, carpets have shown a negative growth. This is mainly because no GST refund is given to our exporters,” Ganesh Kumar Gupta, president of the Federation of Indian Export Organisation, told BloombergQuint. The delay in refunds has tied up the working capital of resulting in lower capacity to take orders. If the government does not rectify this problem, the export figures in November will be even more alarming, he said. The GST rollout has so far acted as a disruption to businessmen, especially the small and medium enterprises. The labour-intensive sectors pointed out above comprise mostly of such small businesses, Gupta said. Moreover, GST rates are still being changed and tweaked by the council, adding to their confusion. India's trade deficit in October widened significantly as exports fell for the first time in 15 months, while higher crude and metal prices inflated the import bill. The current account deficit is now at the widest since November 2014.

 A Deeper Problem?

The downturn in India’s exports cannot be solely blamed on the country’s new tax regime. Even months before the implementation, exports were declining. This is because India’s export intensive industries, such as textile, have been “losing their competitiveness to Bangladesh and Vietnam,” Dharamkirti Joshi, chief economist at brokerage firm Crisil, told BloombergQuint. The global market is seeing one its strongest and most synchronised cyclical upturns and the European region—a major exporter—is doing reasonably well. This means that the problems with India’s export sector are more internal rather than due to global factors, Joshi said.

Source: Bloomberg Quint

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Why the govt should be more worried about the GST-induced sharp fall in exports

Amidst all the negative news that is associated with the Indian economy, the rise of Indian exports was a silver lining. With it, the government could claim with aplomb that the economy was on the right track, and that the pain introduced by demonetisation and goods and services tax (GST) was temporary. But that changed in October when India's merchandise exports declined for the first time in 14 months leading to the highest trade deficit in 35 months at $14 billion (Rs 89,600 crore). Exports fells by 1.1% in October to $23.1 billion (Rs 1,47,840 crore) while imports increased by 7.6% to $37.1 billion (Rs 2,37,440 crore). What must worry the government is that the decline is not because of the Indian traders could not win orders but because they failed to meet their shipping deadlines due to cash crunch introduced by the GST. Reacting to the export data Ganesh Kumar Gupta, President, Federation of Indian Export Organisations (FIEO) said that “the fall was expected as exporters particularly MSME were facing liquidity problem to pay GST for four months in a row without getting any refund. There is immediate need for remedial measures to prevent further decline in exports otherwise the situation may be worse for November 2017".Indian exporters have been unhappy with the imposition of integrated GST and delays in refund of input tax credits by the government. Another source of pain for exporters has been the imposition of 0.1% GST rate for merchant exporter who procure products from other domestic manufacturers.

MOUNTING TROUBLES

A look at the components of Indian merchandise exports lays bare the story of small traders who are struggling with liquidity issues ever since the GST was introduced in the country. In October, exports of chemicals went up by 22.3%, engineering goods by 11.8% and petroleum products rose by 3.2%.These sectors largely have access to big capital due to the average size of the companies that are involved in it. However, ready-made garments sector- largely made up of SMEs registered a decline of (-39.2%), while gems and jewellry, another sector dominated by SMEs posted a decline of (-24.5%). Pharmaceuticals sector also registered a decline of (-8.8%).The decline in exports indicates that the measures announced by the government to ease the problems of exporters have not been effective on ground. In October, the government had announced that it would immediately refund exporters for the month of July and August through cheques from 10 October and 18 October, respectively. As a long term measure, the government plans to introduce e-wallets for all exporters by 1 April 2018, to carry forward the refund process.

DANGER TO JOB CREATION

The government has not had much to boast about when it has come to creating jobs in the last three years. If we go by the data, India generates only 450 jobs as against the demand of 10,000 jobs per month.

But over the past 13 months, many SMEs engaged in exports had begun to expand their workforce. But then, they hit the hurdle of GST which, if not resolved, could force exporters to lay off their staff.

MANAGING THE CURRENT ACCOUNT DEFICIT

India has had a sweet run over the past three years due to low crude oil prices in the international market which has allowed government to save foreign exchange by cutting down on the energy import bill. Oil prices touched a two-year high last week and have risen by 14% over the past one month. This may prove to be a drain on the Indian foreign currency reserves. To compensate for this, the economy must be able to increase its exports at a faster pace. India's current account deficit sharply to $14.3 billion - 2.4% of GDP - at the end of first quarter of 2017-18. The situation is not alarming yet, but the government cannot afford to be complacent about it.

Source: Catch News

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GST: Gujarat cotton ginning industry unhappy  say Centre’s move will block money

In a new notification, 5% GST has been imposed on cotton under the reverse charge mechanism (RCM). The tax will be paid by the recipient of cotton supply the ginners and cotton traders. Earlier, the government had postponed the implementation of the RCM till March 31, 2018. A latest notification related to the goods and services tax (GST) by the revenue department, ministry of finance, has disturbed the cotton ginning industry.A latest notification related to the goods and services tax (GST) by the revenue department, ministry of finance, has disturbed the cotton ginning industry. In the notification, 5% GST has been imposed by the government under the reverse charge mechanism (RCM). Earlier, the government had postponed the implementation of the RCM till March 31, 2018. The notification says that the GST on supply of raw cotton by agriculturist will be liable to be paid by the recipient of such supply under the RCM, thereby affecting the ginners and cotton traders. After the notification, ginners and cotton traders had decided to go on nation-wide strike on Wednesday, though, after a meeting with the commercial tax commissioner of Gujarat, the industry postponed it as the meeting was positive. “GST Council can address this issue and, we are told, the next GST Council meeting will meet in January. We can not wait that long, so the commissioner has asked for some time to work out an interim solution,” said Bharat Wala, president of the Saurashtra Ginners’ Association. Gujarat is the largest cotton producer in the country with having about 30-35% share in production. Out of over 4,300 ginning units in the country about 1,300 are located in Gujarat mainly in Saurashtra and northern part of the state. Cotton Association of India (CAI) estimated 10 million bales (a bale of 170 kg) cotton production in Gujarat for the year 2017-18. If the issue continues, the ginners have expressed their readiness to go on an indefinite strike, a decision on which will be taken after November 20. Wala said, “As of now we have postponed the decision of strike. However, we are ready to go on strike after November 20 if the government will not resolve this issue.” Cotton, under the heading 5201 and 5203, was placed under 5% rate. But since the farmers are not liable to pay the tax and hence not registered under GST, the buyers of raw cotton – the registered persons – will be required to pay the tax on reverse charge basis. According to the cotton ginners, this decision will block working capital and this will directly impact on cotton, cotton seed and cotton oil prices too. Ginners also said that if government will not change the rule, ginning industry may loose buying power. “This decision of the government will block our money in tax. The blockage of funds will reduce our working capital and prompt us to reduce the purchases. How can we buy cotton from farmers when we will have no money with us?” said Arvind Raichura, director of Padadhari village of Rajkot-based Balkrishna Ginning and Pressing Factory.

Source: Financial Express

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Most of Gujarat's trade and industry feels that massive GST reliefs are much ado about nothing

Ahmedabad: Congress vice-president Rahul Gandhi may wax eloquent that his campaign had forced the Narendra Modi government to slash the exorbitant rates on nearly 200 items, but the move does not seem to have amused the worst-affected trade and industry in Gujarat. At best, they say there is only a temporary relief in that the stringent procedure of filling up a maze of tax forms has been put off till March. “There are two types of complaints. One is the stringent bureaucratic procedure which hits at the very ease of doing business and the second are the tax rates which are irrational,” says GST expert Monish Bhalla. He told Firstpost, “It is only a temporary corrective measure and sheer postponement of the procedures for an immediate temporary relief. GST was supposed to be very simple, it is completely the opposite.” Bhalla would know, he has written three books, GST: The Gamechanger, released in 2015, which speaks of the issues facing the business class  GST Unplugged, which also came before the tax regime came into being, and GST Decoded. He calls it an “ostrich head approach” of the government. About the GST rates, Bhalla points out that the “Chief Economic Advisor Arvind Subramanian’s report had recommended capping the rates at 17 percent to 18 percent and that this would yield Rs 2,00,000 crore. In fact, an earlier report also spoke of 17 percent to 18 percent.” There is indeed a relief, “but it is just a temporary reprieve, nothing more,” says Ramnik Jasani, who is the president of the Federation of Auto dealers Association of Gujarat. He points out that after the recent slashing of rates, some items have come under the lower 18 percent slab but the rest are still in the 28 percent bracket. Jasani says that the “key problem is that the automobile industry has been put under the sin category, that is in the luxury goods category.” “It only shows there is no sense of ground realities. When we speak of auto parts industry, which is quite large in Gujarat, even tractor and truck spares come under the 28 percent slab. This is having a big impact on the transport industry in general, and when this happens, it affects the entire economy,” he points out. There are nearly 10,000 tiny and small scale auto parts manufacturing units and 50,000 big and small dealers in Gujarat. “No doubt there is some relief, which is clearly because of the elections. In the procedures, there are still two forms to be filled up but the slab for the tiny and SSI units has been increased to Rs 2 crore after protests. Earlier, it was Rs 75 lakh, then it was Rs 1 crore and now Rs 2 crore. Complete ad hocism,” points out Bharat Berai, who is on the Rajkot Chamber of Commerce and Industry’s GST committee. The relief measures, meanwhile, have only angered the already frustrated synthetic textile industry of Surat since there is nothing in it for them. There are 65,000 textile traders and seven lakh powerlooms in Surat, which produce four crore metres of cloth everyday. Surat accounts for nearly 40 percent of the country’s synthetic textile production. “The twin blows of demonetisation and GST have hit hard as many as five to six lakh workers and every aspect of the textile chain, weaving, processing and trading. This does not seem to mean anything to the government,” asserts Manoj Jain, president of Federation of Surat Textile Traders Associations (FOSTA). He says the industry gave a set of 12 demands and had meetings with Finance Minister Arun Jaitley and Railways Minister Piyush Goyal, while Minister of State for Road Transport Mansukh Mandavia, who belongs to Gujarat, was sent to engage with the industry. Textiles Minister Smriti Irani also met them. “All these meetings yielded nothing except only the inspecter-like attitude of the government as though all of us in the textile industry are thieves and not willing to pay any taxes. Surat must be giving tax revenue of the size of the Haryana Government’s budget,” bemoans Jain.

Source: Firstpost

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Minister Sven-Erik Bucht from the Ministry Of Enterprise And Innovation Sweden visits Mumbai

Mr. Sven-Erik Bucht Minister for Rural Affairs from the Ministry Of Enterprise And Innovation Sweden arrived in Mumbai today to discuss a joint project on smart textiles involving potentially Aditya Birla Group, Swedish company Domsjo and the two governments as well as the EU. The Minister visited the Aditya Birla Group Textile Research Application Development Centre at Kharach, in Gujarat which is India's pioneer in viscose staple fibre (VSF), a man-made, bio-degradable fibre with characteristics akin to cotton. The prime aim of this visit is to boost development on smart textiles from using viscose staple fibre (VSF), cellulosic fibre and pulp as an alternative to cotton and hence the Aditya Birla group is a natural fit with its easily blendable cellulosic fibre. Mr. Bucht also met with Mr. Dilip Gaur Managing Director Grasim, Mr. Vinod Tiwari COO, pulp and fibre business Grasim (Adity Birla Group) in Mumbai to discuss an innovative project and how to best to keep up with the growing demand for textiles with an alternate sustainable solution to cotton. The minister will also discuss the current efforts to create a circular bio-economy in Sweden and its benefits. Special emphasis will be given on how sustainable production of biomass can increase its use within a number of different sectors of society. The objective is to reduce climate effects and the use of fossil-based raw materials and to launch a discussion on a smart way of living without using up the earth’s finite resources. Sweden strongly believes that the textile industry is about to take a giant step from being a supplier of fabrics to becoming a positive force in the development of a responsible society. Sustainable textiles are necessary to improve people’s everyday lives, the health care sector and the environment. It takes an open environment where people from many different backgrounds can meet, get involved and collaborate to find a sought-after solution and this is exactly what we are hoping for from this visit by coming together for the betterment of the society and lessen the environmental impact of the textile industry. The visit is part of the follow up to the joint statement by Prime Minister Stefan Lofven and Prime Minister Modi and its implementation in the areas of innovations and research. It is also a follow up to the Make in India event in Stockholm where Mr. Dilip Gaur, MD & Head Pulp and Fibre Grasim Industries (Aditya Birla Group) were a part of the Indian delegation led by Mr. Suresh Prabhu Minister of Commerce & Industry of India, which aimed at exploring synergies and avenues of partnership between Indian and Swedish industries. Speaking about the collaboration between India and Sweden, Consul General for Sweden Ms. Ulrika Sundberg said “It is inspiring to see the broad range of engagement between Sweden and India particularly Maharashtra, stretching from business and infrastructure to environment, health, skills development, culture and in this instance smart textile. Textile and other closely related industries today have an important challenge when it comes to R&D and production in an environmentally friendly and socially responsible way. With a joint project on smart textiles we will prioritize the environment and work actively to integrate this in all parts of the production line. For us, sustainability, durability, quality and functionality are all important factors for developing a circular bio-economy and I truly hope this visit enhances cooperation in tackling the same for a sustainable and healthy future. ”Speaking about his visit, Minister Sven-Erik Bucht said “We are keen to explore the possibility of a joint project within the area of smart textiles using viscose staple fibre (VSF), cellulosic fibre and pulp as an alternative to cotton. Together, we need a broader approach to address the challenge of climate change and we would like to share our experiences, thoughts and ideas about the practice of a circular bio economy which will help us assume our common responsibility to the environment. My visit to the Aditya Birla group is a part of the bilateral ambition to increase cooperation and trade as well as create synergies and partnerships between the two countries. The Swedish government is heavily involved in developing textile based on sustainable raw materials and we are very interested in supporting the further development of a globally successful textile industry. This in turn will help create jobs in both countries and will also lead to a sustainable and healthy future” Apart from Mumbai and Gujarat Minister Bucht will also visit Pune tomorrow and meet with Swedish companies followed by a round table discussion with i.a. Alfa Laval, DeLaval and Tetra Pak on challenges and opportunities of the food processing and dairy sector as well as its export potential. In the evening he will attend a networking dinner hosted by the Consulate General in Pune. About The Consulate General of Sweden: Established in September 2012, the jurisdiction of the Swedish Consulate General covers Maharashtra, Gujarat and Goa – an area comprising of 173 million people. The Consulates major role in India is to develop bilateral trade relations and also grow finer insights into the Indian system through a gamut of institutions and representatives from varied industries and the regional governments. Its prime aim is to broaden and deepen this coalition with special emphasis on trade and investments. It also focuses on spreading information on Swedish innovations, technologies and services and how they could benefit India. The Consulate works closely with the Embassy of Sweden in Delhi, Business Sweden and the Swedish Chamber of Commerce as Team Sweden to help liaise and increase business contacts between Swedish and Indian companies within certain strategic sectors, such as Energy & Environmental Technology, Health Care & Life Science and ICT.

Source: YarnsandFibers

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Global Textile Raw Material Price 2017-11-15

Item

Price

Unit

Fluctuation

Date

PSF

1393.33

USD/Ton

0.54%

11/15/2017

VSF

2214.26

USD/Ton

0%

11/15/2017

ASF

2651.09

USD/Ton

0%

11/15/2017

Polyester POY

1363.20

USD/Ton

0.72%

11/15/2017

Nylon FDY

3464.49

USD/Ton

0%

11/15/2017

40D Spandex

5949.89

USD/Ton

0%

11/15/2017

Polyester DTY

3268.67

USD/Ton

-0.46%

11/15/2017

Nylon POY

2786.66

USD/Ton

0%

11/15/2017

Acrylic Top 3D

1694.59

USD/Ton

0.45%

11/15/2017

Polyester FDY

3705.50

USD/Ton

0%

11/15/2017

Nylon DTY

5693.81

USD/Ton

0%

11/15/2017

Viscose Long Filament

1604.21

USD/Ton

0.66%

11/15/2017

30S Spun Rayon Yarn

2907.16

USD/Ton

0%

11/15/2017

32S Polyester Yarn

2074.18

USD/Ton

0.36%

11/15/2017

45S T/C Yarn

2877.03

USD/Ton

0%

11/15/2017

40S Rayon Yarn

3072.85

USD/Ton

0%

11/15/2017

T/R Yarn 65/35 32S

2485.40

USD/Ton

0%

11/15/2017

45S Polyester Yarn

2199.20

USD/Ton

0%

11/15/2017

T/C Yarn 65/35 32S

2440.21

USD/Ton

0%

11/15/2017

10S Denim Fabric

1.41

USD/Meter

0%

11/15/2017

32S Twill Fabric

0.87

USD/Meter

0%

11/15/2017

40S Combed Poplin

1.21

USD/Meter

0%

11/15/2017

30S Rayon Fabric

0.67

USD/Meter

0%

11/15/2017

45S T/C Fabric

0.72

USD/Meter

0%

11/15/2017

 

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.15063 USD dtd 15/11/2017). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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Pakistan textile exports hit by rise in prices

Sharp increase in cotton yarn prices in Pakistan by almost 20% has hit hard the export-oriented value-added textile sector. Newly-elected senior vice chairman of The Pakistan Readymade Garment Manufacturers and Exporters Association( PRGMEA,North Zone), Sheikh Luqman Amin said that the unprecedented surge in cotton yarn rates during the cotton crop season is not understandable, as the prices are usually at the lowest ambit these days. He added that the cotton yarn prices have increased by around 20% to Rs.12,000 per bag of 100 pounds from Rs.8,000 due to cartelization of local manufacturers who are holding the stock to create artificial shortage. The PRGMEA senior vice chairman asked the government to take preventive measures, as the export target would not be achieved due to high energy cost and discriminating import duties on industry raw material.He appealed the government to abolish additional regulatory duty on cotton yarn that should be imported freely from anywhere. Sheikh Luqman Amin said that value-added textile sector appreciates the government for accepting its genuine demand to provide 50 percent of the export package incentive on the same terms as for the period from Jan to June, 2017 without condition of increment but this should be implemented without any further delay. He said that exporters were battling hard for their survival in the global market in the face of severe competition with the regional countries, terming funds blockage as main cause of continuous drop in exports. Sheikh Luqman Amin said the government should take drastic steps for enhancing exports and addressing the problems of the industrial sector as the top priority, because uncertainty is negatively affecting the whole textile sector which contributes more than 54% share in total exports of the country. He said that textile has become the most important sector especially after grant of the GSP Plus status by the EU countries but the artificial shortage of cotton yarn has put the ‘free market access’ status at risk. Sheikh Luqman said since the apparel sector already has a very limited production line owing to lack of latest fabric varieties at local level the harsh duties are resulting into significant decline in apparel export. He said that apparel industry is already suffering with the low productivity due to shortage of cotton, high energy cost, and discriminating import duties on the industry’s raw material. He asked PM Khaqan Abbasi to direct policy makers to work for reduction in all input costs, otherwise the export-oriented industries would not only shut down their operations, but millions of workers would also lose their jobs. The newly-elected SVC also proposed the government to release funds to the central bank for immediate payment of duty drawback of taxes to the exporters under PM Package as the immediate payment of all outstanding refunds of sales tax could save the industry.

Source: YarnsandFibers

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Sri Lanka apparel exports rise after reinstatement of EU GSP+

Colombo: European Union's tariff concession Generalized System of Preferences plus (GSP+) has delivered its most prominent success for Sri Lankan exports to-date since its reinstatement, Minister of Industries and Commerce Rishad Bathiudeen says. "As a result of Prime Minister Ranil Wickremesinghe's efforts on GSP Plus, our apparel exports from January to September this year has increased by 11.3% to US $ 1.67 Billion," said the Minister on Wednesday in Colombo. Minister Bathiudeen was addressing the launch event of the third edition of Intex South Asia 2017 in Colombo on 15 November joined by Prime Minister Ranil Wickremesinghe, South African High Commissioner in Sri Lanka Ms R P Marks and High Commissioner of India to Sri Lanka Taranjit Singh Sandhu. Having completed two previous fairs in 2015 and 2016 in Colombo, Intex has now become the largest and sole international textile sourcing event in South Asia for yarns, apparel fabrics, and accessories. A strong presence of Chinese, Indian and Hong Kong participants is seen-along with leading multinationals such as Reliance Industries, Bombay Rayon Fashions Ltd., Mekotex, The Woolmark Company are showcasing their material at this event which concludes on Friday 17. Speaking at the launch, Prime Minister Wickremesinghe called for more events like Intex as a way for Sri Lanka's integration with the region. "Intex is the largest textile sourcing exhibition in the region. It is also an indication of how we are integrated to the global trading system. Sri Lanka apparel industry is important for our economy and is important for integration of Sri Lanka with the global trading system and the rest of South Asia," the Prime Minister said adding that but there is more to be done. "There are many opportunities in the value chain in the region that we have not taken. This type of events will lead to closer integration with South Asian countries," PM Wickremesinghe added. Minister Bathiudeen stressed that the EU GSP Plus has delivered for Sri Lankan apparel exports. "Our government's special efforts to improve our international relations were successful and has resulted in Sri Lanka receiving EU GSP Plus which greatly strengthened our exports, specially apparel exports" Minister Bathiudeen said. "Our apparel exports to EU has increased by only 2% from January to September 2016 in comparison to the same period in 2015. As a result of Prime Minister Ranil Wickremesinghe's efforts, after receiving EU GSP Plus, our apparel exports to EU from January to September this year compared the same period last year at US $ 1.5 billion, has increased by a huge 11.3% to US $ 1.67 Billion. Even though US market is not connected to EU GSP our apparel exports to US too has increased this year by 12% to $ 1.8 billion (in January to September). I am also pleased to say that our overall apparel exports to all countries this year January to September increased by 13.4% to US $ 3.97 billion in comparison to the same period last year at US $ 3.5 billion. We believe this growth trend would continue and therefore expect even better performance next year." In 2016, Sri Lanka's apparel exports were at US $4.86 billion, claiming 43% of total Sri Lankan exports basket of that year.

Source: News Desk

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Bangladesh : Safety monitoring cell in apparel must be independent - Says Alliance chief

The Remediation Coordination Cell (RCC), formed to monitor workplace safety in the garment sector, should be independent and credible so that it can take sound decisions to avert further industrial accidents. “If there is a good system in place and if the retailers and brands continue sourcing from Bangladesh, it is expected that there will not be any disaster in the garment sector,” said Jim Moriarty, executive director of the Alliance, the factory inspection platform of 28 North American retailers. For instance, no disaster like Rana Plaza collapse took place after Alliance started working in July 2013 to fix the structural, electrical and fire loopholes in the garment factories. Moriarty's comments came at a press conference yesterday to unveil the platform's fourth annual report. The platform will leave Bangladesh in July next year after the completion of its five-year tenure. The government has formed the RCC under the labour ministry involving the International Labour Organisation, the Bangladesh Garment Manufacturers and Exporters Association, the Bangladesh Knitwear Manufacturers and Exporters Association and other stakeholders to monitor workplace safety once Accord and Alliance leave. Any monitoring system has to be independent and credible, he said. Independent monitoring means it has to be clear that no outside force can interfere in the technical decision. “When I said credible, it means it has to have the technical capacity to make good decision,” said Moriarty, who is also a former US ambassador to Bangladesh. Meanwhile, 85 percent of all required factory repairs, including 80 percent of high-priority remediation works, have been completed, the report said. A total of 234 Alliance-affiliated factories have completed all material items in their Corrective Action Plans (CAPs) and 162 non-compliant factories have been suspended from Alliance factory list for delays in upgrading of their CAPs. More than 1.3 million workers across 941 Alliance and non-Alliance factories have access to Amader Kotha, the Alliance's confidential worker Helpline. Democratically elected Worker Safety Committees that give workers a seat at the table in monitoring safety issues have been established in 171 factories. More than 1.4 million workers have been trained in basic fire safety, and 1.3 million have participated in refresher courses. Nearly 27,000 security guards have been trained in fire safety leadership while about 20,000 have received refresher training. The Alliance has designed a safety training workshop for senior factory managers and partnered with the Bangladesh University of Engineering and Technology on a graduate-level short course for Bangladeshi engineers, both designed to build in-country capacity on safety. Overhauling safety in hundreds of factories is a massive undertaking, Moriarty said. “We are incredibly proud of what the Alliance has accomplished together with our partners in just four years. Until we achieve our mandate, fortifying safety in Alliance factories and equipping workers with empowerment tools will remain our laser focus.” The factories are demonstrably safer today than when the Alliance started working -- and the hard work that factory owners have undertaken since 2013 is now paying off, as hundreds of factories are reaching CAP closure. This achievement represents a starting line for these factories, for whom maintaining rigorous safety standards must remain an ongoing priority, he said. “We are committed to transitioning our programme in a way that paves the way for sustainable progress beyond 2018,” he added.

Source: The Daily Star

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Pakistn : Non-textile LSM sectors post double-digit growth

LAHORE: Healthy growth registered by Large Scale Manufacturing Sector (LSM) without significant contribution from basic textiles (that has highest weight in LSM index) depicts that Pakistan’s economy is becoming less textile centric. The data released for the first two months of this fiscal reveals that LSM growth was 11.8 percent. The data for September and October is still awaited. The weight of textiles yarn and fabric in LSM is over 20 percent. Its growth during first two months of this fiscal was less than one percent. This shows that other sectors with lower weights in the index grew at much higher pace to register a double digit growth. The sectors that grew above 30 percent during July and August 2017 include iron and steel products, none metallic mineral products and automobiles. Pharmaceuticals, paper and board, wood products, and engineering goods posted double digit growth. During the Pakistan Peoples’ Party (PPP) era, LSM growth was led by the textile sector, but the growth was very low. During the past four years, LSM growth is being led by non-textile sectors and the pace of growth has been very high being 5.6 percent in 2016-17. The growth in LSM during the past four years has been accomplished more from the re-activation of idle capacities than new investments. If the current pace of growth in non-textile sector continued, many sectors will have to go for capacity expansion. Automobile sector for instance is now operating at its optimum capacity in passenger car segment. The demand for cars is increasing at a rapid pace and further supplies would not be possible without new investments. Capacity enhancement in non-textile sectors would enable many industries to achieve economies of scales and launch their products in global markets. A tractor manufacturer has already started exporting its units to many destinations. Pharmaceutical companies are getting approval for their products in developed economies and are on the export path. Home electronics too command some markets in the Middle East. Exports of light engineering products have started increasing. The emergence of the non-textile LSM sector as the main engine of industrial growth is a good omen for our economy. We badly need product diversification instead of depending solely on textiles to increase our exports. This calls for a more broad-based export policy that facilitates all promising sectors instead of being textile-centric. The failure of our export policy is evident from the fact that we have not been able to even maintain our share in the five exporting sectors facilitated by successive governments. Even in textiles we have been gradually losing our share. In 1997-98 our share in textile and clothing in the global market was two percent that has now declined to 1.5 percent ($12 billion out of global textile and clothing trade of over $800 billion). The decline is sharper in leather, sports goods, and surgical instruments. We need to find market for the cars, motorcycles and tractors that are produced in the country. We need more registration of generic medicines in developed economies to boost our pharmaceutical exports. Our auto-parts manufacturers should be facilitated to find new markets in Africa and Central Asia. Cement manufacturers should be facilitated to increase exports through land and sea routes. Currently we do not have any policy to facilitate these potential export industries. The new export policy should focus on lowering the cost of production in all sectors instead of providing subsidies to a few sectors. It is high time to benefit from surge in productivity in non-textile LSM sectors. Textile exports started almost two decades after independence from a low level, when state started supporting the sector. Non-textile industries now need more prudent support. Their export potential is much higher than textiles. It is worth noting that Software exports are growing on the strength of the entrepreneurial spirit of the IT players without any government support. This in fact is a knowledge-based activity that does not require as much capital as talent.

Source: The News Pakistan

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Sweden eyeing possibility of developing smart textile with Aditya Birla Group

The Swedish government plans to strengthen bilateral trade with India and explore smart textile solution involving the Aditya Birla Group, Swedish company Domsjö and the two governments as well as the EU. The trade between the two countries is somewhat skewed with India largely importing raw material from Sweden and exporting value-added products across the globe, said Sven-Erik Bucht, Minister for Rural Affairs from the Ministry of Enterprise And Innovation Sweden, in an interaction with the media on Wednesday. Ranked as 19th trading partner, Sweden exports to India in the first half of this year was up at 5,375 million Sweden Krona against 4,275 million Sweden Krona in the same period last year. Indian exports to Sweden in the first six months of this year was up at 3,178 million Sweden Krona against 3,026 million Sweden Krona logged in the same period last year. Asked whether the Swedish government would attract some investment to produce value-added products from Indian companies, the visiting minister said the government is interested only in facilitating the trade by throwing open the opportunities and it is for the corporates to decide on their investments. “We believe many of Indian companies what to increase food item export to Sweden. For that to happen they need to improve the quality to international standards and we are ready to provide the technology know-how for the same,” he said after sharing his experience on a visit to Aditya Birla Group Textile Research Application Development Centre at Kharach, in Gujarat. The minister will visit Pune to meet the Swedish companies in India such as Alfa Laval, DeLaval and Tetra Pak to discuss the challenges and opportunities in the food processing and dairy sector and its export potential. “We are keen to explore the possibility of a joint project in smart textiles using viscose staple fibre, cellulosic fibre and pulp as an alternative to cotton. Together, we need a broader approach to address the challenge of climate change,” he said while recalling his experience on landing in smoggy and polluted Delhi airport.

Source: Business Line

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