AEPC conveys Indian apparel industry concerns to parliament

Fibre2fashion, October 27, 2017

A delegation from India’s Apparel Export Promotion Council (AEPC) today conveyed exporters’ concerns over the impact of goods and services tax (GST) on apparel exports to a parliamentary standing committee. In its presentation to committee chairman Naresh Gujral, AEPC made him aware of the difficulties being faced by smaller and medium exporters.

The requirement of dedicated resources for GST compliance has also added to the time and cost of exporters, according to an APEC press release.

Incorporated in 1978, AEPC is the official body of apparel exporters in India that helps Indian exporters as well as importers and international buyers.

Describing the overall impact of GST on small and medium exporters to be burdensome and stressful due to substantial increase of working capital and higher transaction cost, APEC chairman Ashok Rajani said the positive impact of GST is yet to be felt by the garment industry, where input costs have not come down.

This has adversely affected production and led to pressure on margins due to lowering of drawback rates.

There is a strong likelihood of Indian garment exports dipping in the coming days as competing nations like Bangladesh and Vietnam have cost advantages because of preferential trade agreements with major export markets and buyers are moving to these destinations for sourcing, the committee was informed. Exporters may be forced to shed jobs as well.

AEPC has requested early consideration of refund of blocked and embedded taxes on purchase of ginned cotton and miscellaneous central and state levies like power cross subsidy, stamp duty, and property tax. It has asked for refund under Rebate of State Levies (RoSL) as well.

The industry body has also asked for allowing utilization of Merchandise Exports from India Scheme (MEIS) scrips for use in payment of central GST, state GST and integrated GST to ease the challenges being faced to working capital blockage and other procedural issues. To arrest the decline in exports, AEPC wants competitive exchange rate and rupee appreciation to be stabilized to protect the interest of exporters. (DS)

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