New Delhi, Feb 16 (KNN) Commenting over the sharp decline in the volume of exports of readymade garments and fabric sector as revealed by the government data, the Micro, Small and Medium Enterprises (MSMEs) that primarily dominate the sector worry that with the teething effects prevailing under Goods and Services Tax (GST), things are far from getting eased.

The Data from the government revealed exports of readymade garments fell 8.4 percent to $1.39 billion, also Cotton yarn and fabric exports declined 9.6 percent to $0.84 billion.

Talking to KNN, Animesh Saxena, an MSME garment exporter said that the difficulties that surrounded the MSMEs during the early GST days continue to haunt the sector.

“The GST is yet to become a Good and Simple Tax for the country, the low trade figures explains that quite well”.

Saxena further said that the profitability is badly hit and the Indian garments are not able to stand the global competition.  Duty drawback rate as well as the ‘not very smooth’ GST refund mechanism is leading to a lot of complication, he added.

Echoing along similar lines, Federation of Indian Exporters (FIEO) in a statement said that the labour intensive sector including garments couldn’t perform well in exports due to the continuing effects of the new taxation in the country.

A slowdown in exports from labour-intensive sectors like garments, carpets, handicrafts and man-made textiles was primarily due to liquidity crunch as tax refunds have been getting blocked since the introduction of goods and services tax, FIEO said in a statement.

FIEO further informed that the exporters have been asking the government to look into the refund issue “seriously” by undertaking a drive so as to clear all cases by March 31, 2018. (KNN/DA)