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Tirupur knitwear units seek lower GST slab

The Tirupur Exporters’ Association (TEA) has forward a number of measures before the Union Textile Ministry including keeping the industry under lowest slab of GST, rebate on state levies, labour law reforms and setting up of knitwear board, among others. TEA president Raja M Shanmugham said. This, because of its MSME dominant nature and the slender margins in which the textile industry was operating, the entire textile sector may be placed in the lowest slab of the GST.

With this, the industry can absorb the levy without any significant impact on business, he said at a meeting with Textile minister Smriti Irani. In his memo to the minister, he said that there is a long pending problem whereby job workers are being denied EPCG licences for capital goods imports.

Despite repeated representations and even after the issue of clarificatory circular in September 2016, this issue has not been resolved yet. There is an urgent need to resolve the issue to reinstate a climate of investment in micro and small industries that has shelved investment plans for more than 18 months now, he added.
The benefits announced in the special package in June 2016 included rebate on state levies, EPF benefits for new employment are yet to be passed on to the exporters. Optional ESI/EPF contribution for employees below a certain threshold minimum wages as indicated in Para 61 and 62 of Budget speech of 2015 that is yet to be implemented through an amendment in PF and ESI Acts may be expeditiously given effect, he wrote in his memo.

Shanmugham stated that as a permanent solution to the problem of lack of interface between government and the industry, a focused and dedicated agency similar to Silk Board or Coir Board be formed specifically for the knitwear sector which can serve as a catalyst for rapid growth of this segment.