Exporters in Tirupur want the Centre to extend integrated goods and services tax (IGST) exemption period for import of capital goods under Export Promotion Capital Goods (EPCG) scheme beyond March 31, 2019, for another two years.They want the exemption for import of inputs under the advance authorisation scheme too.
Post GST rollout, exporters have sought the exemption. Considering the needs of the sector, the centre had been extending the exemption term, phase-wise (for six months’ period each), since July 1, 2017. The current phase ends on March 31, 2019.
The garment sector in Tirupur, comprising mostly of medium and small units, is upgrading operations to improve the quality of garments and increase productivity, in keeping with the growing demands of buyers. Several units in Tirupur are increasingly expressing concerns over the imposition of IGST beyond March 2019 as they fear the tax amount paid for importing capital goods would not be adjusted. The units are confused whether to place orders with machinery suppliers by presuming that the exemption period would continue beyond March 2019 or to wait for further clarification.
Tirupur, India’s leading knitwear exporter contributes around 50 per cent of the country’s knitwear exports. Around 20,000 production units – including micro, small and medium scale enterprises – function in Tirupur, employing nearly seven lakh people directly.