GST Council recommends for allowing refund to fabrics on account of inverted duty structure & Rate change made in respect of Chenille fabrics and other fabrics under heading 5801

Sub: GST Council recommends for allowing refund to fabrics on account of inverted duty structure & Rate change made in respect of Chenille fabrics and other fabrics under heading 5801

Dear Member,

We are glad to inform you that the Ministry of Finance has issued a Press Release on 21^st July, 2018 where the GST Council has recommended allowing of refund to fabrics on account of inverted duty structure & reduction in the GST rate of Chenille fabrics and other fabrics falling under heading 5801.

The Council’s Chairman, Shri Sri Narain Aggarwal, Chairman, has welcomed the GST Council’s decision on refund of credit on account of accumulated duty structure on fabrics.  The Council thanks the Hon’ble Prime Minister, Shri Narendra Modiji, Hon’ble Finance Minister and Smt. Smriti Zubin Irani, Honble Union Minister of Textiles for providing a great relief to the textile industry in general and fabrics manufacturers in particular.

Refund of accumulated ITC on fabrics, which remain unrebated due to a condition that refund of accumulated ITC on account of inversion will not be allowed; increased the financial burden and liquidity crunch on the exporters as well as domestic manufacturers was substantial. In this connection, the Council had taken up the matter with concerned authorities at various foras for an early solution in the matter, as huge amount of the exporters funds were blocked.

Therefore this step of allowing refund of accumulated ITC on fabrics will benefit more than 5 lakh weavers and knitters in the country.  This will be a big boost to the MMF segment in particular.

Please note that “The refund of accumulated ITC shall be allowed only with the prospective effect on the purchases made after the notification is issued”.

Members may kindly make a note of the above.

Thanking you,

Yours faithfully,

S.BALARAJU
EXECUTIVE DIRECTOR