While spinning and weaving segments of the synthetic textile industry have welcomed GST, traders in the industry are not so enthusiastic. Small and medium enterprises with an annual turnover of up to Rs 1.5 crores have been allowed to file quarterly income returns and pay tax instead of the current provision of monthly filings.
The weaving community has welcomed the tax rate revision, along with the extension of the reverse charge mechanism till March 2018. There has been a reduction in tax rates on manmade yarn from 18 per cent to 12 per cent. The GST levy on job work has been cut from 12 per cent to five per cent.
Weavers welcome the quarterly returns for entities with a turnover of up to Rs 1.5 crores but want this provision extended to the entire small and medium industry, irrespective of turnover amounts. The reduced rate of GST is expected to greatly benefit the spinning and power loom sectors, besides improving on global competitiveness and helping ensure the country’s poor are clothed at an affordable cost.
But traders say those below a turnover of Rs 2 crores have to be kept out of the tax net. There are roughly around 65,000 to 75,000 traders in the Rs 50,000 crore synthetic textile industry in Surat.