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Chairmans Desk

Dear Friends,

As we write this column, the festival of lights “DIWALI” is upon us and we wish all our readers and patrons ‘A very Happy Diwali and Prosperous New Year!”

The festive season has brought new cheer for the exporting community as the burdens on account of GST were reduced significantly by the decisions taken in the GST Council meeting held on 6th October, 2017. Further export data released for the month of September 2017 also saw an overall growth of 26% in exports and 15% in cotton textiles. A visit to the Intertextile Shanghai Apparel Fabrics & Yarn Expo Fair, Shanghai, China held from 11 to 13 October, 2017 was also fruitful as all the participants reported good sales. We also had a fruitful interaction with the Hon’ble Minister of Commerce & Industry, Shri Suresh Prabhu under the auspices of FIEO and the Chief Commissioner of Customs, JNPT.

Relaxation under GST

We are glad to note that the Government has accepted many of the suggestions put forth by TEXPROCIL and other EPCs with regard to the GST. The Government has exempted imports against Advance Authorizations, EPCG Authorizations and by 100% EOUs from the payment of IGST which has come as a huge relief to the exporters. The Government has also put in place a mechanism to expedite refund of IGST on goods exported in the months of July and August 2017. Merchant exporters will be allowed to procure goods from the manufacturers for exports by paying GST @ 0.10% which will substantially improve their working capital position.

Export Data

Exports during September 2017 have shown a growth of 25.67 per cent. As per the provisional data released recently by DGFT, during September 2017, the top ten commodity groups of export (accounting for 82% of total exports) have exhibited positive growth over the corresponding month of last year including exports of Cotton Textiles (Yarn, Fabrics &Made-ups) which has reported a growth of 15.20% and RMG of all Textiles recording a growth of 29.39%.

Cumulative value of exports for the period April-September 2017-18 was US $ 147.19 billion as against US $ 131.98 million registering a positive growth of 11.52 per cent over the same period last year. Exports of Cotton Textiles (Yarn, Fabrics &Made-ups) during this period recorded a growth of 3.78% and RMG of all Textiles recorded a growth of 8.60%.

All this data augurs well for the industry and it is hoped that the growth trend is sustained upto March 2018.

ITSAF & Yarn Expo Fair

The Council continued its promotional activities in the Chinese market by organising group participation of the Members at Intertextile Shanghai Apparel Fabrics & Yarn Expo Fair, Shanghai, China from 11 to 13 October, 2017. India Pavilion at ‘Yarn Expo’ saw participation of 39 exhibitors along with 11 exhibitors showcasing their products at ‘Intertextile Apparel Fabrics fair’, held concurrently in different Halls in the National Exhibition and Convention Center (Shanghai), China.  This was one of the events supported by the Ministry of Commerce with limited funding under MAI scheme.

On the sidelines of the Council’s participation in the fair, we met with Mr. Prashant Lokhande, Counsellor (Economic & Commerce) & Ms Sukanya, Second Secretory (E&C), Embassy of India, Beijing on 9th October, 2017 and discussed the need to address tariff issues on textile import from India to China in order to bridge the widening trade deficit which is heavily in favour of China. Mr. Lokhande acknowledged the importance of Textiles in the Indian economy and assured full support for the development of this vital sector in the Chinese market.

We also met Mr. Cao Jiachang, Chairman and senior representatives of China Chamber of Commerce for Import and Export of Textiles and Apparel (CCCT) on 9th October, 2017 at their office to discuss possibility of enhancing mutual cooperation in pursuance of MoU signed during ‘Textiles India’ program at Ahmedabad. We requested the Chairman of CCCT to extend help in organising B2B meetings at various textile clusters for Texprocil members so as to explore possibility of increasing export of Yarn and Fabrics to China. Mr. Cao welcomed the idea and assured all possible support to TEXPROCIL.

We also had a fruitful meeting with Mr Chen Jing, President of China Textile Machinery and Technology Import & Export Limited Corporation (CTMTC) on 9th October, 2017 and requested them to increase their sourcing of yarn from India.

Meeting with Hon’ble Minister of Commerce

A meeting with Shri Suresh Prabhu, Hon’ble Union Commerce & Industry Minister was organized by FIEO in New Delhi on 6th October, 2017 which was attended by me on behalf of the Council. In the meeting, we had put forth various suggestions to promote exports of Cotton textiles. The suggestions included increase in the MEIS rate on exports of Cotton Made ups to the EU from 2% to 5%, extending MEIS and 3% Interest Equalization Schemes to Cotton Yarn etc. Detailed proposals on the various provisions in the FTP 2015-20 and the GST related issues were submitted to the Hon’ble Minister.

As regards GST, we had suggested that imports against Advance Authorizations, EPCG Authorizations and by EOUs should be exempted from the payment of IGST. Further, it was also suggested that procurement of goods by the merchant exporters from the manufacturers should be allowed without payment of GST for exports, refund of accumulated Input Tax Credit on fabrics and speedy refund of GST on export goods without linking it with the monthly returns. We also pointed out to the Hon’ble Minister that export benefits for the textiles & clothing sector should be continued as their removal will put our exporters at a severe disadvantage vis-à-vis our competitors thereby adversely affecting the export performance.

We are happy to note that most of our suggestions on GST have been accepted and we hope that similarly our suggestions on the Foreign Trade Policy will also find favor with the Government.

Meeting with the Chief Commissioner of Customs, JNPT

Many of our members have represented that the Customs at JNPT and at other ports are extending the lower rate of Duty Drawback (2%) as against the Composite rate (7.5%) on the exports of Cotton Made ups. Exporters have also pointed out regarding non-receipt of ROSL amounts against exports of Cotton Made ups. In this regard, the Council along with FIEO had a meeting with Shri Vivek Johri, Chief Commissioner of Customs, JNPT in his office on October 3, 2017. The Commissioner has assured us that he would look into the matter and take necessary steps to ensure that exporters get the full Drawback and ROSL amounts, if the prescribed conditions are fulfilled. The Council has compiled a list of the shipping bills against which lower drawback amounts have been extended and has sent the list to the Chief Commissioner.  We expect the problem to get resolved soon.

Pending Issues

Despite relentless pursuit by the Council, an important issue related to refund of accumulated Input Tax Credit on fabrics is yet to be addressed. We hope the Government will look into issue and take a favourable decision.

Apart from the above, the Council had meetings with the DGFT, Officials from the Drawback Department and Ministry of Textiles in Delhi on October 11 and 12, 2017.  These meetings were a follow-up on various proposals submitted by the Council for the Foreign Trade Policy and ROSL Scheme.      

The Council has also represented to the Government to include fabrics under the ROSL Scheme. In this regard, the Council will be arranging factory visits to weaving units in Ahmedabad and Coimbatore for the Drawback Committee.  We hope the Government will consider the Council’s proposal and include fabrics under the ROSL which will give a big boost to this labour intensive sector.

Friends, as we bring in the New Year, expectations are high that procedures will be further simplified, refunds under GST will be speeded up and embedded taxes will be reimbursed. The markets are looking up and the overall situation is showing signs of improvement. We need to keep our faith and identify new markets and develop innovative products and as the new taxation system under GST stabilises, we will surely improve our competitiveness.