The textile chain under the optional Cenvat provisions presently enjoys zero percent central excise benefit. The South Indian textile industry to support the sector proposed that a uniform 5 percent GST or lowest slab on all textile and apparel product.

This will help facilitate the migration to the GST ensuring better compliance under the upcoming GST regime that is expected to be implemented from July 1, 2017.

Suresh Ananda Kumar, Secretary of the Southern India Mills Association (SIMA) said that their association has proposed the lower slab rate for the textile industry considering the nature of the industry. He also informed that they have submitted a memorandum to the textile minister Smriti Irani in this regard.

Apart from the request regarding GST, the memorandum also requested the Prime ministers’ office and the Ministry of Commerce to consider concluding free trade agreements with the potential importing countries to help prevent the Indian textile industry falling sick of unhealthy competition.

This comes in the aftermath of the rising rupee and high import tariffs of almost 20 percent on textile products in almost all the importing companies.

The Association also stated that the deserving sectors such handlooms should be given the benefit of tax rebate under direct benefit transfer system.