Textile industry welcomes reduction in GST on man made fibre yarn
Industry says higher GST rate was creating a huge inverted duty problem for synthetic sector.
Coimbatore: Southern India Mills Association (SIMA) on Saturday said that the reduced rate of GST for MMF yarn from 18 to 12 per cent would benefit the spinning and power loom sector.
In a statement, SIMA chairman P Nataraj said that the man-made fibres (MMF) and yarns were slotted under 18 per cent GST rate while the fabrics under five per cent with a condition that no refund of Input Tax Credit would be allowed
at fabric stage.
This was creating a huge inverted duty problem for the synthetic sector and inflating the cost of synthetic products that already had serious threat by cheaper imports.
The industry has been pleading the GST Council to reduce MMF yarn rate to 12 per cent to avoid cost escalation of yarn and facilitate the power loom sector to remain competitive, Nataraj said.