The Apparel Export Promotion Council (AEPC) has called for uniformity in Goods and Services Tax (GST) rates across the entire man-made fibres value chain ahead of the central government’s interim budget. The council has urged the government to introduce a uniform GST rate of 5 percent for the entire value chain, which includes fibre, yarn, and fabric. Currently, the GST rates for man-made fibres are 18 percent on fibre, 12 per cent on yarn, and 5 percent on cloth. The AEPC argues that the current rates result in unutilized input credit and liquidity issues for MSME units.
The council has also requested the government to raise the interest equalisation rates under the scheme to 5 per cent for all apparel exporters. This move is expected to boost the competitiveness of the apparel industry in the global market and help them access necessary working capital.
The AEPC has further suggested that tax concessions should be provided to apparel manufacturers who adopt environmental, social, and governance (ESG) standards and other international quality compliances. Furthermore, it has requested budgetary support for branding and marketing activities to promote Made in India products.
The interim budget, set to be presented by Union Finance Minister Nirmala Sitharaman on February 1, comes ahead of the general elections expected in April-May. The session will start on January 31 with President Droupadi Murmu’s address to the joint sitting of the Parliament.
