Budget 2024: Apparel Export Promotion Council expects Uniformity in GST for Entire Value Chain

In the Budget 2024, the Apparel Export Promotion Council expects uniformity in GST for entire value chain
Budget 2024 - Apparel Export Promotion - Council - Uniformity in GST - Entire Value Chain - taxscan

The Apparel Export Promotion Council (AEPC) has urged the Central Government for tax incentives, including uniform GST rates, enhanced interest subsidies, and budgetary support for branding and marketing in the upcoming budget.

The council pointed out that the interest equalisation rates were revised downward from 3 to 2 per cent for non-MSME manufacturer exporters under the interest equalisation scheme on pre-and post-shipment export credit.

“High cost of capital has been a major bottleneck for the exporting community. AEPC has requested the government to increase the rates under the scheme to 5 per cent for all the apparel exporters,” which will in-turn increase the apparel industry’s competitiveness in the international market and enable them to avail necessary working capital.

“Indian apparel exporters are constrained to use only those trimmings and embellishments, which are pre-approved by the buyer and these are mostly required to be sourced from overseas suppliers nominated by the garment buyers,” the council said.

The MMF GST rate on fibre is 18%, yarn is 12%, and fabric is 5%. The Export Promotion Council believes that it results in unutilized input credit and consequent liquidity issues for MSME units. Further, it was requested that the government to increase the interest equalization rates under the scheme to 5 per cent for all the apparel exporters.

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