June 17, 2024

AEPC Seeks Uniform GST Levies Across MMF Textile Value Chain

To boost local manufacturing and also clothing exports, the Apparel Export Promotion Council (AEPC), has sought uniformity in GST levies and more tax incentives in the union budget to be announced on February.

“A uniform tax of five percent should be applied to the Goods and Services tax (GST) along the whole manmade fibre (MMF) value chain like fibres, yarns and fabrics,” the AEPC statement said.

The GST rate on manmade fibre is currently 18 percent, yarn is 12 percent and fabric is 5 percent. As a result, MSME units are experiencing unutilised input credit and liquidity problems.

AEPC has also requested for tax breaks for garment manufacturers who implement Environmental, Social, and Governance (ESG) and other global compliances and quality standards.

According to the trade body, interest equalisation rates on pre and post-shipment export loans for manufacturers who are not MSME exporters have been lowered from 3 to 2 percent.

AEPC requested the government to raise the rates under the plan to 5 percent for all apparel exporters.

The statement further said that foreign buyers insist on preserving consistency and quality and avoiding the use of counterfeits in order to protect their brand image and any departure in the quality and specification leads to the shipment’s rejection.

AEPC recommended that embellishments and trims be incorporated under the Import of Goods at Concessional Rates (IGCR) duty regulations as some embellishments and trims are not duty free.

AEPC submitted a list of items currently not permitted, such as draw cord, elastic band/tape, metal tab/stopper/clip, velcro tape, leather badge, and D-ring, and requested to include these items in the duty exemption list.

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