New Delhi, July 4 (KNN) The manmade fibre and yarn that has been placed under the tax slab of 18 per cent under the Goods and Services Tax (GST) needs to be shifted to a tax slab of 12 per cent, textile industry body Confederation of Indian Textile industry (CITI) recently said.

CITI in a memorandum to the Textile Ministry, Finance Ministry and Revenue Secretary made the request citing the problems with the current tax slab of 18 per cent in the GST.

Since the Small and Medium Enterprises (SMEs) work on marginal profits, such high tax slabs will prove to be disastrous said CITI.

It further said that the synthetic sector in the country is having a bad time due to problems such as higher manufacturing costs due to the high input prices. The competition from countries like Thailand, Indonesia, South Korea and China furthers worsens the situation.

CITI grieved  that the prices of manmade fibre and yarn in India are higher when compared to the other competing countries. Also in the rival countries such as Indonesia and China, there is lower tax and high export incentives to manufacture manmade fibre based textile goods.

Predicting the adverse impact of the 18 per cent GST, the CITI projects that the industry would not be able to face the market pressure for more than three months, therefore it appealed for an immediate revision along the line. (KNN/ DA)