The government’s think tank, NITI Aayog, is investigating tax irregularities in the textile industry. To better understand the difficulties the sector is facing, it had last week called a conference of industry organisations affiliated to the sector.
A senior government source stated that “NITI Aayog has sought views from the textile industry on tax related matters that are impeding the growth of the sector,” adding that the Aayog will solidify its opinion and make appropriate suggestions to the finance ministry for consideration.
The import duty on cotton and textile machines, the inverted duty structure in the textile value chain for man-made fibres, and other issues were some of those brought up by the industry at the recently held stakeholder consultation.
As a sharp increase in cotton costs has reduced the competitiveness of the Indian textile sector, the industry has requested the elimination of the 11% import levy on cotton.
“Issues related to increasing the customs duty on manmade yarn to 10% from the existing 5% to check rising imports along with higher imports of apparel from Bangladesh and Sri Lanka were discussed,” a different official reported.
The other issues involved removing the goods and services tax (GST) from employment in the MSME sector and lowering the GST on air travel. Airlines are becoming uncompetitive, according to the industry.
