The textile industry wants an uniform levy of five per cent on all textile and clothing products under GST (Goods and Services Tax). The assumption is such a levy would ensure smooth migration of the entire textile value chain to the GST tax structure with full compliance, create a win-win strategy for all stakeholders and bring substantial revenue to the exchequer when compared to existing revenues.

The Indian textile industry feels net revenue will double if the GST rate is fixed at the lowest slab of five per cent without any exemption across the value chain. The industry wants existing export benefits, including duty drawback rates, to be continued for some time after the implementation of GST as the industry has just begun taking advantage of these schemes and grabbing global export opportunities.

Sectors like handlooms could be given benefits from tax refunds under the direct benefit transfer system. Free trade agreements with potential importing countries, especially the European Union and Britain, would help as the strong rupee and high import tariffs of up to 20 per cent on various textile products in almost all major importing countries have made the Indian textile and clothing industry uncompetitive.