The predominantly cotton-based textile industry, the second largest employment provider and meeting the clothing needs of people and fetching sizable export earnings, has been pleading the Central Government to classify cotton textiles under 5 per cent GST rate.
M Senthilkumar, Chairman, The Southern India Mills’ Association (SIMA) has highly appreciated and thanked the concerted and constant efforts made by Union Textile Minister, Smriti Zubin Irani for fully understanding the needs of the industry and persuading the Finance Minister and Prime Minister to classify the entire cotton textile value chain under 5 per cent GST rate. He has also thanked the Union Finance Minister and the officials of the Ministry of Finance for favourably considering the request of the cotton textile industry. He has also thanked the Chief Ministers of all the State Governments, especially the southern States for strongly recommending for 5 per cent GST rate and ultimately achieving the same.
Senthilkumar has stated that as the textile industry has been under the optional route since 2004 and the fabrics have been under zero VAT rate, the 5 per cent GST rate would bring substantial revenue apart from widely broad basing the tax net across the textile value chain and ensuring compliance. He has also stated that 5 per cent GST rate on readymade garments below Rs 1,000 would greatly benefit the common man across the country, being the mass consumption item.
SIMA chief has stated that 5 per cent GST rate on cotton fibre would sustain the competitiveness of over 20 million cotton farmers as this rate across the value chain would enable the cotton textile industry to remain globally competitive, achieve substantial growth rate and increase cotton fibre consumption and thereby increase the earnings of the farmers.