Textile exporters feel with GST the country's exports will become uncompetitive in global markets, therefore want an exemption from the tax. GST has been finalised between 5 and 18 per cent on various products depending on the type, value and services involved in it. Additionally, a five per cent GST is applicable on job work. The foreign trade policy allows fulfillment of export obligations under various schemes through third party exports. Such a provision of getting exports goods without payment of GST from textile manufacturers will lead to ease of doing business and a seamless flow of credits.

Texprocil wants exemption for the textile industry from furnishing bank guarantees while executing B-1 bonds especially for those players who hold a membership with an export promotion council. Bank guarantees increase cost unnecessarily.

The GST levy has been cut from 18 per cent to five per cent. Earlier, the GST for job works related to textile yarns, other than manmade fibers and textile fabrics, was fixed at five per cent while for manmade fibers and yarns and made-ups/garments, the same tax levy stood at 18 per cent. Most manufacturing activities in the textile sector take place through job work and the reduction in the GST rate has come as a huge relief for the sector.