The Confederation of Indian Textile Industry (CITI) has welcomed the reduction of GST rates for manmade fiber yarns and its products from 18 per cent to 12 per cent. CITI feels this will help strengthen the entire textile value chain and make the Indian textile industry globally more competitive. It has sorted out a big issue of inverted duty for manmade fiber products as it was causing a serious escalation of the cost of synthetic products, which was further leading to cheaper imports from competing countries like China and Indonesia.
As of now, there is no refund of input tax credit at the fabric stage and under the GST regime, with the abolition of 12.5 per cent countervailing duty and four per cent special additional duty, imports have become a much cheaper option than sourcing fabrics from the domestic market. CITI is the apex industry chamber of the textile and clothing industry of India.
Reduced GST rates are expected to benefit not only the spinning and powerloom sectors but also support the initiative of Make In India and achieve the national objective of creating more employment opportunities. CITI hopes that the accumulated input tax credit will be refunded at the fabric stage especially for processed fabrics.