Apparel manufacturers in Tirupur knitwear cluster are eagerly looking forward to get the Goods and Service Tax (GST) Bill rolled on as it could provide them with a level playing field vis-à-vis- the competitors from other states.
At present, the lack of uniformity in taxations in different states has been a major problem when it comes to fixing the competitive prices for the end products.
“The GST will rationalise the tax structure. Presently, the slabs of Value Added Tax vary from one State to another. “In a cluster like Tirupur where the inputs (i.e. raw materials) like cotton are sourced from other States and the end products manufactured here been sold in other States, the uniformity in taxes that could come with the GST Bill will extend lots of benefits to the garment makers here”, pointed out R. Damodaran, joint secretary of South India Hosiery Manufacturers Association.
The GST Bill is also expected to increase the compliances and reduce the occurrences of any black marketing.
S. Dhananjayan, a senior member of Institute of Chartered Accountants of India and also an industry consultant, was of the opinion that the GST would allow the manufacturers’ an opportunity for an end-to-end set off of the input credit paid on the inputs sourced from other States, which is one of major advantages.
Optimistic
The apparel manufacturers sounded optimistic that the present concerns or scepticism that GST would be only beneficial only to ‘consuming States’ (i.e. States having large consumption of goods) for getting revenue share could be overcome soon.
