New Delhi, Mar 8 (KNN) In a bid to boost the textile sector and make it globally competitive, the Cabinet has approved a scheme to rebate all state and central embedded taxes on apparel and made-up textile segments making them zero-rated.

Ministry of Textiles in a statement said "Rebate of all embedded state and central taxes/levies for apparel and made-ups segments would make exports zero-rated, thereby boosting India's competitiveness in export markets.”

Welcoming the Cabinet decision on approving the scheme to rebate state and central embedded taxes to support the textile sector, National President of the Textile Association (India), T.K. Sen Gupta told KNN India that the move is a good booster for apparel and garment industry.

He said “India's exports of apparel and garments have fallen down in last 2-3 years. We are now at the 5th position in exports of apparel and garment in the world.”

He stated that China is number one exporter of apparel and garment, followed by Bangladesh, Vietnam, Combodia and then India. Bangladesh exports of apparel and garments are worth USD 32 billion while that of India is at USD 17 billion.

With this decision, government has given a very good impetus to the industry which will benefit all states’ small and medium garments manufacturers, he added.

The Past National President of the Textile Association, Arvind Sinha also appreciated the move and said that the move will improve the cash flows.

However he claimed that the markets are in recession, whole system is in a recession but this step of the government clearly indicates that the government means business.

Now, industry should focus on the business, he added.

One of the leading industry chambers of the textile and clothing sector of India, Confederation of Indian Textile Industry (CITI) in a statement thanked the Union Cabinet chaired by Prime Minister, Narendra Modi for approving the scheme as it will enable the Government to take various measures for making exports of apparel and made-ups free of any embedded Central and State levies.

He said “The proposed measures will boost India’s competitiveness in export markets and ensure equitable and inclusive growth of apparel and made-ups sector.”

The Cabinet decision provides for a scheme to rebate all embedded State and Central Taxes/levies for apparel and made-ups which have a combined share of around 56% in India’s textile export basket. Rebate of taxes /levies has been permitted through an IT-driven scrip system at notified rates.

CITI Chairman pointed out that the new scheme only covers apparels and made-ups but does not cover other important sectors of fabric and cotton yarn.

To ensure that no taxes are exported and to make Indian cotton yarn and fabric globally competitive, CITI requested the Government to include cotton yarn and fabric in the new proposed scheme.

It will not only help to boost cotton yarn and fabric exports but also increase the employment opportunities and inclusive growth in the entire textile value chain, he added. (KNN/YV)