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India’s apparel production on consistent decline, delay in RoSL - IGST refunds double whammy for MSMEs : AEPC

Updated: Mar 14, 2018 02:23:59am

New Delhi, Mar 14 (KNN) The apparel output in the country comprising of a fair share of Micro, Small and Medium Enterprises (MSMEs) have registered a decline of 10.4 per cent for the April-Jan 2017-18 period, something that the apparel sector have been fearing all along, Apparel Export Promotion Council (AEPC) said in a statement.

AEPC said that the decline is seeming to be the new normal since May 2017.

AEPC indicated earlier about the gradual decline in the production on account of the issues which have arose after the implementation of GST.

As per the IIP figures, there  has been a month to month decline in apparel productivity, From a positive growth  1.3 % in April, 2017, May saw a fall of 5%.In  June the decline was 3.2 % while in July, it was 5.1 %. August, September, October, November and December recorded 6.4 %, 7.2 %, 11 %, 13.1 % and 13.5% dip respectively.

Commenting over the latest figures, HKL Magu, Chairman, Apparel Export Promotion Council (AEPC) said For the period Apr- Jan 2017-18, there has been a drastic decline of 10.4%, in the apparel production.  This has come at a time when exports are already registering a decline. Exports are falling since onwards with January seeing a decline of a 14 %.

The Industry is suffering as their funds are blocked and they are unable to pay suppliers on time. Suppliers don’t give advance, since they can’t carry them forward for an indefinite period.

“This has resulted in the decline in apparel production. The biggest deterrent to the Industry’s sentiments has been the severe capital blockage due to the dual constraint of delays in RoSL disbursements and IGST refunds. Until the refunds start flowing, things will not improve. The dip in production will not allow us to meet our export target of $20 billion”, Magu said.

AEPC further informed that it has been in talks with different Ministries as well as think tank NITI Aayog but the problems are yet to see a solution.

“Post GST roll out we have made several presentations to the Ministry of textile, Ministry of Commerce Drawback Committee, NITI Aaayog, Parliamentary Standing Committee etc”.

AEPC has also apprised the Minister of State for MSME Giriraj Singh about the concerns and informed him that capital blockage is proving fatal for the sector.

Prior to that AEPC made a request to the Ministry of Commerce and Industry to urgently release the total ITC Credit and IGST of Rs. 4097 Crores which is blocked till date. AEPC has also informed the Ministry of Commerce that on account of new taxes there is a shortfall of around 5% under GST and therefore several blocked and embedded taxes may be refunded through higher drawback and RoSL rates, along with refund of GST input tax credit(ITC). (KNN/DA)


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