SlideShare a Scribd company logo
TEXTILE AND APPARELTEXTILE AND APPARELTEXTILE AND APPARELTEXTILE AND APPAREL
GST IMPACT ANALYSISGST IMPACT ANALYSISGST IMPACT ANALYSISGST IMPACT ANALYSIS
BY BHARAT D SARAWGEE & COBY BHARAT D SARAWGEE & COBY BHARAT D SARAWGEE & COBY BHARAT D SARAWGEE & CO.
35A Raja35A Raja35A Raja35A Raja BasantBasantBasantBasant Roy Road, Kolkata 700029Roy Road, Kolkata 700029Roy Road, Kolkata 700029Roy Road, Kolkata 700029
9830112891, 033 241977369830112891, 033 241977369830112891, 033 241977369830112891, 033 24197736
www.bharatds.comwww.bharatds.comwww.bharatds.comwww.bharatds.com
shwetabsarawgee@gmail.comshwetabsarawgee@gmail.comshwetabsarawgee@gmail.comshwetabsarawgee@gmail.com
INDUSTRY
OVERVIEW
Composition is primarily SSI and unorganized sector
Huge Employment Generation
Large Contributor to forex earnings ie Exports
Low Indirect Tax Incidence
Integrated Units as well as stand alone Looms
High Price Sensitivity
FEATURES
BHARAT D SARAWGEE & CO.
VALUE CHAIN
FIBRE
PRD
PRODUCT
SPINNING WEAVING FINISHING
APPAREL
MANUF
FINISHING
FIBRE FABRICYARN APPAREL
BHARAT D SARAWGEE & CO.
PRODUCT PROFILE
NATURAL
FIBRES
MAN MADE FIBRES (MMF)
FIBRE YARN FABRIC APPAREL
REST OF THE WORLD
Natural Fibres MMF
INDIA
Natural Fibres MMF
BHARAT D SARAWGEE & CO.
GST- LEGAL FRAMEWORK
SGST• VAT
• Entry Tax
• Purchase Tax
• Octroi
• Luxury Tax
CGST
• ED
• Service Tax
IGST
• CVD
• SAD
• CST
Dual Model GST
CGST for Central Taxes
SGST for State Taxes
Cross Credit not allowed
IGST for Interstate and Import
Can be setoff against CGST and
SGST
Destination Based Tax
Consuming state will collect Tax
BHARAT D SARAWGEE & CO.
PROPOSED GST RATES
Particulars Rates
Exempted Goods and Services Nil
Precious Metal 2%-6%
Merit Goods 12%
General Rate 17%-18%
De Merit Goods 40%
The above rates are total of SGST and CGST
Only One CGST rate, SGST rate may vary within a small band
BHARAT D SARAWGEE & CO.
CURRENT INDIRECT TAX STRUCTURE
Lack of Fibre Neutrality- Duty differentiation basis Fibre Category
Variation in tax rates basis Integration- Discouragement of Integarted plants with higher
Duties
SSI exemption availed by 80% of the Industry
Classification Dispute- Saree Fabric or Apparel?
Nil rate w/o CENVAT is mostly adopted by the players in the Natural Fibre segment
Blocked Input taxes pushed to production
Duty Drawback schemes in Exports
EXISTING INDIRECT TAXATION- FEATURES
BHARAT D SARAWGEE & CO.
CURRENT TAX SCENARIO- EXCISE DUTY
TYPE FIBRE YARN FABRIC Ready made Garments (RMG)
NATURAL
FIBRES
0% without
CENVAT and
6% with
CENVAT
0% without CENVAT
and 6% with
CENVAT
0% without CENVAT
and 6% with
CENVAT
2% w/o CENVAT and 12.5% with CENVAT –
items with MRP>=Rs 1000 sold under brand
name
OR
0% w/o CENVAT and 6% with CENVAT
MMF 12% with
CENVAT
12% with CENVAT 12% with CENVAT 2% w/o CENVAT and 12.5% with CENVAT –
items with MRP>=Rs 1000 sold under brand
name
OR
0% w/o CENVAT and 12.5% with CENVAT
480 companies rated by ICRA in spinning and weaving industry of over 57000 crore turnover, the excise incidence is
only 1% as the chain is mostly cotton based.
Source- ICRA
BHARAT D SARAWGEE & CO.
CURRENT TAX SCENARIO- VAT
FIBRE YARN FABRIC Ready made
Garments (RMG)
NATURAL
FIBRES
0% -6% 0% -6% 0% -6% 4% -6%
MMF 4% -8% 4% -8% 4% -8% 4% -8%
BHARAT D SARAWGEE & CO.
CURRENT TAX RATES- PRODUCT WISE
State and central Taxes Combined
Textile CategoriesTextile CategoriesTextile CategoriesTextile Categories RNR (%)RNR (%)RNR (%)RNR (%)
Khadi, cotton textiles (handlooms) 4.04.04.04.0
Cotton textiles 7.1
Woollen textiles 9.3
Silk textiles 9.6
Art silk, synthetic fibre textiles 10.2
Jute, hemp, mesta textiles 9.0
Carpet weaving 5.6
Readymade garments* 10.5
Miscellaneous textile products 12.0
All SegmentsAll SegmentsAll SegmentsAll Segments 9.39.39.39.3
• IMPACT ANALYSIS
IMPACT ANALYSIS
NATURAL FIBRES
NATURAL FIBRES
Textile Input Goods
Non Textile Input Goods
Capital Inputs
Input Services
VAT/CST
ED, VAT/CST /BCD,CVD,SAD
ED,VAT/CST
CGST, SGST/IGST
CGST, SGST/IGST
CGST,SGST/ IGST/BCD,IGST
ST
CGST, SGST/IGST
FIBRE
Mills/Powerlooms
Current Taxes
GST Regime
Credittable in GST
GST ON VALUE CHAIN OF NATURAL (COTTON) FIBRE
Textile Input Goods
Non Textile Input Goods
Capital Inputs
Input Services
VAT/CST
CGST, SGST/IGST
ED,VAT/CST
CGST, SGST/IGST
ED, VAT/CST /BCD,CVD,SAD
CGST,SGST/ IGST/BCD,IGST
CGST, SGST/IGST
ST
ED,VAT/CST
CGST, SGST/IGST
Apparel Factory
Blocked Credit -Existing
YARNFABRIC
Assumed that all the players are on optional route of nil excise duty
APPARELSTEXTILE
ITEMS
BHARAT D SARAWGEE & CO.
Textiles even if placed in merit Goods, the proposed rate is high compared to 4%-
6% RNR for Cotton Textiles
Blocking of Working Capital on account of payment of taxes
Market highly price sensitive- Higher GST will increase price -detrimental to
market share
Input taxes blocked will be passed on to the consumer
Removal of duty difference in Integrated Mills and Power looms -Promotion of
Process Integration and earning of economies of scale
Difficult to break Tax Net- Exemption limit is only Rs 10 lacs
IMPACT
BHARAT D SARAWGEE & CO.
Incentive to Modernisation- Cost of Input Capital Goods will be lowered to
the extent of input Credit
Compliance simplification- One Tax one law
Incentive to deal with GST compliant suppliers, as Input Credit not taken by
the non complied supplier will add to the cost
IMPACT
BHARAT D SARAWGEE & CO.
MAN MADE FIBRES
Fibre Neutrality in Textile Eco System- Similar duties for the industry with no
differentiation to Natural fibres
Level Playing Field- will be competitive with Cotton textiles in line with World
market scenario
Encouragement for production of MMF against Cotton
Huge Boost for increase in Export Market- Heavy demand for MMF
Import of Machinery will become cheaper as credit of IGST will be available
against earlier non utilization of CVD- incentives of Duty refund on Capital goods
available in Natural Fibres only
IMPACT
BHARAT D SARAWGEE & CO.
Export to be classified as Zero rated Supply
Input Credits on goods and services will be available as refund
Duty Drawback Scheme existing will become defunct
In case of Duty Drawback rates higher than input credit refund, profitability
will be impacted
Blockage of Working Capital for payment of taxes up front
IMPACT
BHARAT D SARAWGEE & CO.
Imported fabric in country will become competitive on account of Credit of
IGST against earlier non availment of CVD credit to importers
Export boost on account of total refund of input taxes
IMPACT
BHARAT D SARAWGEE & CO.
ED on MRP concept will be replaced by Transaction Value- subsidy
Blocking of Funds in Interstate Stock Transfer
Deletion of Entry tax from state list
Elimination of CST underrecoveries for traders
Elimination of state boundaries and paper work, leading to economic transportation and
reduction in cost.
Additional Monthly Returns
Complex Credit mechanism, every state to have three credit pools.
GENERAL IMPACT
BHARAT D SARAWGEE & CO.
Average RNR for Industry is approx is 9.3 with Ready made Garments being highest
18% Standard GST is very High for the sector , demotivation to Make in India strategy
12% GST for Merit Goods will also be higher compared to existing RNR
All the items in the value chain ie textile inputs and outputs to carry similar rate for non
blocking of credits
Increased revenue for Government may be shared with the Industry in form of improved
subsidy scheme
Standard GST rate of 18% may Dis incentivize Exports
REPRESENTATION BY THE INDUSTRY
BHARAT D SARAWGEE & CO.
Difficult to bring Small Scale units and unorganized sector under Tax Net- (Around
5 lacs powerloom units and and knitting units in India under Unorganised sector)
Huge Compliance to be made by SSI units , not doing any compliance in current
scenario
Sharp Increase in price of Cotton Garments
CHALLENGES
BHARAT D SARAWGEE & CO.
THANK YOU

More Related Content

What's hot

What is Reverse Charge Mechanism Under GST?
What is Reverse Charge Mechanism Under GST?What is Reverse Charge Mechanism Under GST?
What is Reverse Charge Mechanism Under GST?
SAG Infotech
 
Introduction to igst and levy of igst
Introduction to igst and levy of igstIntroduction to igst and levy of igst
Introduction to igst and levy of igst
ShubhiShrivastava16
 
GST PRESENTATION
GST PRESENTATIONGST PRESENTATION
GST PRESENTATION
CA Gaurav Mishra
 
1.gst constitutional provisions and features of constitution (101st amendme...
1.gst   constitutional provisions and features of constitution (101st amendme...1.gst   constitutional provisions and features of constitution (101st amendme...
1.gst constitutional provisions and features of constitution (101st amendme...
Mainan Ray
 
Provisions Regarding Baggage, Goods Imported or Exported by Post, Courier and...
Provisions Regarding Baggage, Goods Imported or Exported by Post, Courier and...Provisions Regarding Baggage, Goods Imported or Exported by Post, Courier and...
Provisions Regarding Baggage, Goods Imported or Exported by Post, Courier and...
DVSResearchFoundatio
 
HISTORY OF GST IN INDIA
HISTORY OF GST IN INDIAHISTORY OF GST IN INDIA
HISTORY OF GST IN INDIA
Kanchan Agarwal
 
Residential status notes
Residential status notesResidential status notes
Residential status notes
Paritosh chaudhary
 
Service tax
Service taxService tax
Service tax
Altacit Global
 
PPT on gst audit
PPT on gst auditPPT on gst audit
PPT on gst audit
Amit Nimal
 
Duty DrawBack
Duty DrawBackDuty DrawBack
Duty DrawBack
Sundar B N
 
GOODS AND SERVICE TAX NETWORK (GSTN)
 GOODS AND SERVICE TAX NETWORK (GSTN) GOODS AND SERVICE TAX NETWORK (GSTN)
GOODS AND SERVICE TAX NETWORK (GSTN)
Ramesh a_k
 
WORKS CONTRACT UNDER GST
WORKS CONTRACT UNDER GSTWORKS CONTRACT UNDER GST
WORKS CONTRACT UNDER GST
Admin SBS
 
i.tax Sec 80
i.tax Sec 80i.tax Sec 80
i.tax Sec 80
VIPIN SINGLA
 
Registrations under GST in India
Registrations under GST in IndiaRegistrations under GST in India
Registrations under GST in India
sanjay gupta
 
Final annual report of readymade garments
Final annual report of readymade garmentsFinal annual report of readymade garments
Final annual report of readymade garments
jaimin parmar
 
Registration under GST Law
Registration under GST LawRegistration under GST Law
Registration under GST Law
Vijaya Kumar Kavilikatta
 
Registration under GST
Registration under GSTRegistration under GST
Registration under GST
Rishab Malik
 
Presentation on Income Tax Deductions
Presentation on Income Tax DeductionsPresentation on Income Tax Deductions
Presentation on Income Tax Deductions
Nitin Pant
 
Wealth tax notes
Wealth tax notesWealth tax notes
Wealth tax notes
Paritosh chaudhary
 
Indirect taxes
Indirect taxesIndirect taxes
Indirect taxes
P.Ravichandran Chandran
 

What's hot (20)

What is Reverse Charge Mechanism Under GST?
What is Reverse Charge Mechanism Under GST?What is Reverse Charge Mechanism Under GST?
What is Reverse Charge Mechanism Under GST?
 
Introduction to igst and levy of igst
Introduction to igst and levy of igstIntroduction to igst and levy of igst
Introduction to igst and levy of igst
 
GST PRESENTATION
GST PRESENTATIONGST PRESENTATION
GST PRESENTATION
 
1.gst constitutional provisions and features of constitution (101st amendme...
1.gst   constitutional provisions and features of constitution (101st amendme...1.gst   constitutional provisions and features of constitution (101st amendme...
1.gst constitutional provisions and features of constitution (101st amendme...
 
Provisions Regarding Baggage, Goods Imported or Exported by Post, Courier and...
Provisions Regarding Baggage, Goods Imported or Exported by Post, Courier and...Provisions Regarding Baggage, Goods Imported or Exported by Post, Courier and...
Provisions Regarding Baggage, Goods Imported or Exported by Post, Courier and...
 
HISTORY OF GST IN INDIA
HISTORY OF GST IN INDIAHISTORY OF GST IN INDIA
HISTORY OF GST IN INDIA
 
Residential status notes
Residential status notesResidential status notes
Residential status notes
 
Service tax
Service taxService tax
Service tax
 
PPT on gst audit
PPT on gst auditPPT on gst audit
PPT on gst audit
 
Duty DrawBack
Duty DrawBackDuty DrawBack
Duty DrawBack
 
GOODS AND SERVICE TAX NETWORK (GSTN)
 GOODS AND SERVICE TAX NETWORK (GSTN) GOODS AND SERVICE TAX NETWORK (GSTN)
GOODS AND SERVICE TAX NETWORK (GSTN)
 
WORKS CONTRACT UNDER GST
WORKS CONTRACT UNDER GSTWORKS CONTRACT UNDER GST
WORKS CONTRACT UNDER GST
 
i.tax Sec 80
i.tax Sec 80i.tax Sec 80
i.tax Sec 80
 
Registrations under GST in India
Registrations under GST in IndiaRegistrations under GST in India
Registrations under GST in India
 
Final annual report of readymade garments
Final annual report of readymade garmentsFinal annual report of readymade garments
Final annual report of readymade garments
 
Registration under GST Law
Registration under GST LawRegistration under GST Law
Registration under GST Law
 
Registration under GST
Registration under GSTRegistration under GST
Registration under GST
 
Presentation on Income Tax Deductions
Presentation on Income Tax DeductionsPresentation on Income Tax Deductions
Presentation on Income Tax Deductions
 
Wealth tax notes
Wealth tax notesWealth tax notes
Wealth tax notes
 
Indirect taxes
Indirect taxesIndirect taxes
Indirect taxes
 

Viewers also liked

15020441094, garment manufacturing
15020441094, garment manufacturing15020441094, garment manufacturing
15020441094, garment manufacturing
Gaurav Baishya
 
Garment Development Presentation
Garment Development PresentationGarment Development Presentation
Garment Development Presentation
g_isernia
 
Presentation on Apparel Merchandising
Presentation on Apparel MerchandisingPresentation on Apparel Merchandising
Presentation on Apparel Merchandising
Textile Aid
 
Garment manufacturing process fabric to finished product
Garment manufacturing process fabric to finished productGarment manufacturing process fabric to finished product
Garment manufacturing process fabric to finished product
Prasanta Sarkar
 
Fashionmktingwk15 Review
Fashionmktingwk15   ReviewFashionmktingwk15   Review
Fashionmktingwk15 Review
janemonkey
 
Production Management by Sandra Carr
Production Management by Sandra CarrProduction Management by Sandra Carr
Production Management by Sandra Carr
TrinidadandTobagoCreativeIndustries
 
Case Study Sri Lanka Lean Wip Reduction
Case Study Sri Lanka   Lean Wip ReductionCase Study Sri Lanka   Lean Wip Reduction
Case Study Sri Lanka Lean Wip Reduction
JAMES_MARSH
 
Lean Manufacturing and Principles
Lean Manufacturing and PrinciplesLean Manufacturing and Principles
Lean Manufacturing and Principles
Azmir Latif Beg
 
Garments process
Garments processGarments process
Garments process
harsaanharry
 
Supply Chain
Supply ChainSupply Chain
Supply Chain
FNian
 
Tafe Fashion Marketing notes wk 9
Tafe Fashion Marketing notes wk 9Tafe Fashion Marketing notes wk 9
Tafe Fashion Marketing notes wk 9
janemonkey
 
Application of information technology in gi k
Application of information technology in gi kApplication of information technology in gi k
Application of information technology in gi k
kibrom G
 
Fashion Marketing Week 3
Fashion Marketing Week 3Fashion Marketing Week 3
Fashion Marketing Week 3
janemonkey
 
Lean manufacturing tools for garment industry
Lean manufacturing tools for garment industryLean manufacturing tools for garment industry
Lean manufacturing tools for garment industry
Azmir Latif Beg
 
Industrial Engineering Guide to Job Interview Preparation (Book Cover)
Industrial Engineering Guide to Job Interview Preparation (Book Cover)Industrial Engineering Guide to Job Interview Preparation (Book Cover)
Industrial Engineering Guide to Job Interview Preparation (Book Cover)
Prasanta Sarkar
 
Application Of Workstudy
Application Of WorkstudyApplication Of Workstudy
Application Of Workstudy
bejayrocks
 
Artistic apparel audit presentation ...
Artistic apparel audit presentation ...Artistic apparel audit presentation ...
Artistic apparel audit presentation ...
Üzâîr Âhmêd
 
Industrial engineering intro
Industrial engineering introIndustrial engineering intro
Industrial engineering intro
vishnuvardhinikj
 
Manufacturing And Product Design July 07 Briefing Session
Manufacturing And Product Design July 07 Briefing SessionManufacturing And Product Design July 07 Briefing Session
Manufacturing And Product Design July 07 Briefing Session
FNian
 
Garment production systems
Garment production systemsGarment production systems
Garment production systems
Dr.S.Kathirvelu Subramanian
 

Viewers also liked (20)

15020441094, garment manufacturing
15020441094, garment manufacturing15020441094, garment manufacturing
15020441094, garment manufacturing
 
Garment Development Presentation
Garment Development PresentationGarment Development Presentation
Garment Development Presentation
 
Presentation on Apparel Merchandising
Presentation on Apparel MerchandisingPresentation on Apparel Merchandising
Presentation on Apparel Merchandising
 
Garment manufacturing process fabric to finished product
Garment manufacturing process fabric to finished productGarment manufacturing process fabric to finished product
Garment manufacturing process fabric to finished product
 
Fashionmktingwk15 Review
Fashionmktingwk15   ReviewFashionmktingwk15   Review
Fashionmktingwk15 Review
 
Production Management by Sandra Carr
Production Management by Sandra CarrProduction Management by Sandra Carr
Production Management by Sandra Carr
 
Case Study Sri Lanka Lean Wip Reduction
Case Study Sri Lanka   Lean Wip ReductionCase Study Sri Lanka   Lean Wip Reduction
Case Study Sri Lanka Lean Wip Reduction
 
Lean Manufacturing and Principles
Lean Manufacturing and PrinciplesLean Manufacturing and Principles
Lean Manufacturing and Principles
 
Garments process
Garments processGarments process
Garments process
 
Supply Chain
Supply ChainSupply Chain
Supply Chain
 
Tafe Fashion Marketing notes wk 9
Tafe Fashion Marketing notes wk 9Tafe Fashion Marketing notes wk 9
Tafe Fashion Marketing notes wk 9
 
Application of information technology in gi k
Application of information technology in gi kApplication of information technology in gi k
Application of information technology in gi k
 
Fashion Marketing Week 3
Fashion Marketing Week 3Fashion Marketing Week 3
Fashion Marketing Week 3
 
Lean manufacturing tools for garment industry
Lean manufacturing tools for garment industryLean manufacturing tools for garment industry
Lean manufacturing tools for garment industry
 
Industrial Engineering Guide to Job Interview Preparation (Book Cover)
Industrial Engineering Guide to Job Interview Preparation (Book Cover)Industrial Engineering Guide to Job Interview Preparation (Book Cover)
Industrial Engineering Guide to Job Interview Preparation (Book Cover)
 
Application Of Workstudy
Application Of WorkstudyApplication Of Workstudy
Application Of Workstudy
 
Artistic apparel audit presentation ...
Artistic apparel audit presentation ...Artistic apparel audit presentation ...
Artistic apparel audit presentation ...
 
Industrial engineering intro
Industrial engineering introIndustrial engineering intro
Industrial engineering intro
 
Manufacturing And Product Design July 07 Briefing Session
Manufacturing And Product Design July 07 Briefing SessionManufacturing And Product Design July 07 Briefing Session
Manufacturing And Product Design July 07 Briefing Session
 
Garment production systems
Garment production systemsGarment production systems
Garment production systems
 

Similar to GST impact analysis - Textile & Apparels

Around Two-Fifths of the Readymade Garment Industry to Face 2% Excise Levy
Around Two-Fifths of the Readymade Garment Industry to Face 2% Excise LevyAround Two-Fifths of the Readymade Garment Industry to Face 2% Excise Levy
Around Two-Fifths of the Readymade Garment Industry to Face 2% Excise Levy
TextileStock
 
Oil & gas sector gst impact analysis
Oil & gas sector  gst impact analysisOil & gas sector  gst impact analysis
Oil & gas sector gst impact analysis
shwetika12
 
Fastener Emerging Market(F) Latest
Fastener Emerging Market(F) LatestFastener Emerging Market(F) Latest
Fastener Emerging Market(F) Latest
Deba Prasad
 
Influence of gst in apparel costing
Influence of gst in apparel costingInfluence of gst in apparel costing
Influence of gst in apparel costing
Saranya Narayana Moorthy
 
Present Situation of BD RMG
Present Situation of BD RMGPresent Situation of BD RMG
Present Situation of BD RMG
Motakabbir Rahman Mine
 
Goods & Services Tax_Impact on Different Industries Part 5 of 5)
Goods & Services Tax_Impact on Different Industries Part 5 of 5)Goods & Services Tax_Impact on Different Industries Part 5 of 5)
Goods & Services Tax_Impact on Different Industries Part 5 of 5)
Suryansh Dhawan
 
Master ppt
Master pptMaster ppt
Master ppt
Pathik Shah
 
Impact of GST on Logistics
Impact of  GST on LogisticsImpact of  GST on Logistics
Impact of GST on Logistics
Karan Ajmera
 
A study on the knitwear industry of bangladesh
A study on the knitwear industry of bangladeshA study on the knitwear industry of bangladesh
A study on the knitwear industry of bangladesh
Abul Rahat
 
GST_PPT_CSC_EGOV_June2017.PPT
GST_PPT_CSC_EGOV_June2017.PPTGST_PPT_CSC_EGOV_June2017.PPT
GST_PPT_CSC_EGOV_June2017.PPT
shakti894016
 
GST Overview
GST OverviewGST Overview
GST Overview
TyMechSeminar
 
Handbook ppt on gst goods & service tax _ top gst experts
Handbook   ppt on gst goods & service tax _ top gst expertsHandbook   ppt on gst goods & service tax _ top gst experts
Handbook ppt on gst goods & service tax _ top gst experts
CA Milin Shah
 
Budget 2010
Budget 2010Budget 2010
Budget 2010
gudia1987
 
GST INDIA: Impact Analysis
GST INDIA: Impact AnalysisGST INDIA: Impact Analysis
GST INDIA: Impact Analysis
ANNI GUPTA
 
Textile Value Chain- Dec 2021
Textile Value Chain- Dec 2021Textile Value Chain- Dec 2021
Textile Value Chain- Dec 2021
TEXTILE VALUE CHAIN
 
Projectppts
ProjectpptsProjectppts
Projectppts
savisca
 
Recent Changes - 50th GST Council Meet
Recent Changes - 50th GST Council MeetRecent Changes - 50th GST Council Meet
Recent Changes - 50th GST Council Meet
NiteshJain148
 
GST
GST GST
Input tax credit in GST
Input tax credit in GSTInput tax credit in GST
Input tax credit in GST
Central Board of Excise and Customs
 
2016 gst impact on business strategy of pharmaceutical companies
2016 gst impact on business strategy of pharmaceutical companies2016 gst impact on business strategy of pharmaceutical companies
2016 gst impact on business strategy of pharmaceutical companies
TATA Strategic Management Group- Chemicals Vertical
 

Similar to GST impact analysis - Textile & Apparels (20)

Around Two-Fifths of the Readymade Garment Industry to Face 2% Excise Levy
Around Two-Fifths of the Readymade Garment Industry to Face 2% Excise LevyAround Two-Fifths of the Readymade Garment Industry to Face 2% Excise Levy
Around Two-Fifths of the Readymade Garment Industry to Face 2% Excise Levy
 
Oil & gas sector gst impact analysis
Oil & gas sector  gst impact analysisOil & gas sector  gst impact analysis
Oil & gas sector gst impact analysis
 
Fastener Emerging Market(F) Latest
Fastener Emerging Market(F) LatestFastener Emerging Market(F) Latest
Fastener Emerging Market(F) Latest
 
Influence of gst in apparel costing
Influence of gst in apparel costingInfluence of gst in apparel costing
Influence of gst in apparel costing
 
Present Situation of BD RMG
Present Situation of BD RMGPresent Situation of BD RMG
Present Situation of BD RMG
 
Goods & Services Tax_Impact on Different Industries Part 5 of 5)
Goods & Services Tax_Impact on Different Industries Part 5 of 5)Goods & Services Tax_Impact on Different Industries Part 5 of 5)
Goods & Services Tax_Impact on Different Industries Part 5 of 5)
 
Master ppt
Master pptMaster ppt
Master ppt
 
Impact of GST on Logistics
Impact of  GST on LogisticsImpact of  GST on Logistics
Impact of GST on Logistics
 
A study on the knitwear industry of bangladesh
A study on the knitwear industry of bangladeshA study on the knitwear industry of bangladesh
A study on the knitwear industry of bangladesh
 
GST_PPT_CSC_EGOV_June2017.PPT
GST_PPT_CSC_EGOV_June2017.PPTGST_PPT_CSC_EGOV_June2017.PPT
GST_PPT_CSC_EGOV_June2017.PPT
 
GST Overview
GST OverviewGST Overview
GST Overview
 
Handbook ppt on gst goods & service tax _ top gst experts
Handbook   ppt on gst goods & service tax _ top gst expertsHandbook   ppt on gst goods & service tax _ top gst experts
Handbook ppt on gst goods & service tax _ top gst experts
 
Budget 2010
Budget 2010Budget 2010
Budget 2010
 
GST INDIA: Impact Analysis
GST INDIA: Impact AnalysisGST INDIA: Impact Analysis
GST INDIA: Impact Analysis
 
Textile Value Chain- Dec 2021
Textile Value Chain- Dec 2021Textile Value Chain- Dec 2021
Textile Value Chain- Dec 2021
 
Projectppts
ProjectpptsProjectppts
Projectppts
 
Recent Changes - 50th GST Council Meet
Recent Changes - 50th GST Council MeetRecent Changes - 50th GST Council Meet
Recent Changes - 50th GST Council Meet
 
GST
GST GST
GST
 
Input tax credit in GST
Input tax credit in GSTInput tax credit in GST
Input tax credit in GST
 
2016 gst impact on business strategy of pharmaceutical companies
2016 gst impact on business strategy of pharmaceutical companies2016 gst impact on business strategy of pharmaceutical companies
2016 gst impact on business strategy of pharmaceutical companies
 

Recently uploaded

XYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdf
XYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdfXYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdf
XYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdf
bhavenpr
 
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...
Syed Muhammad Humza Hussain
 
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence Lawyers
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence LawyersDefending Weapons Offence Charges: Role of Mississauga Criminal Defence Lawyers
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence Lawyers
HarpreetSaini48
 
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Massimo Talia
 
Ease of Paying Tax Law Republic Act 11976
Ease of Paying Tax Law Republic Act 11976Ease of Paying Tax Law Republic Act 11976
Ease of Paying Tax Law Republic Act 11976
PelayoGilbert
 
原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样
原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样
原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样
osenwakm
 
Matthew Professional CV experienced Government Liaison
Matthew Professional CV experienced Government LiaisonMatthew Professional CV experienced Government Liaison
Matthew Professional CV experienced Government Liaison
MattGardner52
 
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
9ib5wiwt
 
fnaf lore.pptx ...................................
fnaf lore.pptx ...................................fnaf lore.pptx ...................................
fnaf lore.pptx ...................................
20jcoello
 
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
SKshi
 
办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样
办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样
办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样
9ib5wiwt
 
Understanding about ITR-1 and Documentation
Understanding about ITR-1 and DocumentationUnderstanding about ITR-1 and Documentation
Understanding about ITR-1 and Documentation
CAAJAYKUMAR4
 
Business and Corporate Case Update (2024)
Business and Corporate Case Update (2024)Business and Corporate Case Update (2024)
Business and Corporate Case Update (2024)
Wendy Couture
 
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
osenwakm
 
Rokita Releases Soccer Stadium Legal Opinion
Rokita Releases Soccer Stadium Legal OpinionRokita Releases Soccer Stadium Legal Opinion
Rokita Releases Soccer Stadium Legal Opinion
Abdul-Hakim Shabazz
 
Energizing Communities, Fostering Growth, Sustaining Futures
Energizing Communities, Fostering Growth, Sustaining FuturesEnergizing Communities, Fostering Growth, Sustaining Futures
Energizing Communities, Fostering Growth, Sustaining Futures
USDAReapgrants.com
 
What are the common challenges faced by women lawyers working in the legal pr...
What are the common challenges faced by women lawyers working in the legal pr...What are the common challenges faced by women lawyers working in the legal pr...
What are the common challenges faced by women lawyers working in the legal pr...
lawyersonia
 
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
CIkumparan
 
Patenting_Innovations_in_3D_Printing_Prosthetics.pptx
Patenting_Innovations_in_3D_Printing_Prosthetics.pptxPatenting_Innovations_in_3D_Printing_Prosthetics.pptx
Patenting_Innovations_in_3D_Printing_Prosthetics.pptx
ssuser559494
 
1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样
1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样
1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样
9ib5wiwt
 

Recently uploaded (20)

XYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdf
XYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdfXYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdf
XYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdf
 
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...
 
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence Lawyers
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence LawyersDefending Weapons Offence Charges: Role of Mississauga Criminal Defence Lawyers
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence Lawyers
 
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
 
Ease of Paying Tax Law Republic Act 11976
Ease of Paying Tax Law Republic Act 11976Ease of Paying Tax Law Republic Act 11976
Ease of Paying Tax Law Republic Act 11976
 
原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样
原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样
原版制作(PSU毕业证书)宾州州立大学公园分校毕业证学历证书一模一样
 
Matthew Professional CV experienced Government Liaison
Matthew Professional CV experienced Government LiaisonMatthew Professional CV experienced Government Liaison
Matthew Professional CV experienced Government Liaison
 
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
 
fnaf lore.pptx ...................................
fnaf lore.pptx ...................................fnaf lore.pptx ...................................
fnaf lore.pptx ...................................
 
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
 
办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样
办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样
办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样
 
Understanding about ITR-1 and Documentation
Understanding about ITR-1 and DocumentationUnderstanding about ITR-1 and Documentation
Understanding about ITR-1 and Documentation
 
Business and Corporate Case Update (2024)
Business and Corporate Case Update (2024)Business and Corporate Case Update (2024)
Business and Corporate Case Update (2024)
 
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
 
Rokita Releases Soccer Stadium Legal Opinion
Rokita Releases Soccer Stadium Legal OpinionRokita Releases Soccer Stadium Legal Opinion
Rokita Releases Soccer Stadium Legal Opinion
 
Energizing Communities, Fostering Growth, Sustaining Futures
Energizing Communities, Fostering Growth, Sustaining FuturesEnergizing Communities, Fostering Growth, Sustaining Futures
Energizing Communities, Fostering Growth, Sustaining Futures
 
What are the common challenges faced by women lawyers working in the legal pr...
What are the common challenges faced by women lawyers working in the legal pr...What are the common challenges faced by women lawyers working in the legal pr...
What are the common challenges faced by women lawyers working in the legal pr...
 
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
 
Patenting_Innovations_in_3D_Printing_Prosthetics.pptx
Patenting_Innovations_in_3D_Printing_Prosthetics.pptxPatenting_Innovations_in_3D_Printing_Prosthetics.pptx
Patenting_Innovations_in_3D_Printing_Prosthetics.pptx
 
1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样
1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样
1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样
 

GST impact analysis - Textile & Apparels

  • 1. TEXTILE AND APPARELTEXTILE AND APPARELTEXTILE AND APPARELTEXTILE AND APPAREL GST IMPACT ANALYSISGST IMPACT ANALYSISGST IMPACT ANALYSISGST IMPACT ANALYSIS BY BHARAT D SARAWGEE & COBY BHARAT D SARAWGEE & COBY BHARAT D SARAWGEE & COBY BHARAT D SARAWGEE & CO. 35A Raja35A Raja35A Raja35A Raja BasantBasantBasantBasant Roy Road, Kolkata 700029Roy Road, Kolkata 700029Roy Road, Kolkata 700029Roy Road, Kolkata 700029 9830112891, 033 241977369830112891, 033 241977369830112891, 033 241977369830112891, 033 24197736 www.bharatds.comwww.bharatds.comwww.bharatds.comwww.bharatds.com shwetabsarawgee@gmail.comshwetabsarawgee@gmail.comshwetabsarawgee@gmail.comshwetabsarawgee@gmail.com
  • 3. Composition is primarily SSI and unorganized sector Huge Employment Generation Large Contributor to forex earnings ie Exports Low Indirect Tax Incidence Integrated Units as well as stand alone Looms High Price Sensitivity FEATURES BHARAT D SARAWGEE & CO.
  • 4. VALUE CHAIN FIBRE PRD PRODUCT SPINNING WEAVING FINISHING APPAREL MANUF FINISHING FIBRE FABRICYARN APPAREL BHARAT D SARAWGEE & CO.
  • 5. PRODUCT PROFILE NATURAL FIBRES MAN MADE FIBRES (MMF) FIBRE YARN FABRIC APPAREL REST OF THE WORLD Natural Fibres MMF INDIA Natural Fibres MMF BHARAT D SARAWGEE & CO.
  • 7. SGST• VAT • Entry Tax • Purchase Tax • Octroi • Luxury Tax CGST • ED • Service Tax IGST • CVD • SAD • CST Dual Model GST CGST for Central Taxes SGST for State Taxes Cross Credit not allowed IGST for Interstate and Import Can be setoff against CGST and SGST Destination Based Tax Consuming state will collect Tax BHARAT D SARAWGEE & CO.
  • 8. PROPOSED GST RATES Particulars Rates Exempted Goods and Services Nil Precious Metal 2%-6% Merit Goods 12% General Rate 17%-18% De Merit Goods 40% The above rates are total of SGST and CGST Only One CGST rate, SGST rate may vary within a small band BHARAT D SARAWGEE & CO.
  • 10. Lack of Fibre Neutrality- Duty differentiation basis Fibre Category Variation in tax rates basis Integration- Discouragement of Integarted plants with higher Duties SSI exemption availed by 80% of the Industry Classification Dispute- Saree Fabric or Apparel? Nil rate w/o CENVAT is mostly adopted by the players in the Natural Fibre segment Blocked Input taxes pushed to production Duty Drawback schemes in Exports EXISTING INDIRECT TAXATION- FEATURES BHARAT D SARAWGEE & CO.
  • 11. CURRENT TAX SCENARIO- EXCISE DUTY TYPE FIBRE YARN FABRIC Ready made Garments (RMG) NATURAL FIBRES 0% without CENVAT and 6% with CENVAT 0% without CENVAT and 6% with CENVAT 0% without CENVAT and 6% with CENVAT 2% w/o CENVAT and 12.5% with CENVAT – items with MRP>=Rs 1000 sold under brand name OR 0% w/o CENVAT and 6% with CENVAT MMF 12% with CENVAT 12% with CENVAT 12% with CENVAT 2% w/o CENVAT and 12.5% with CENVAT – items with MRP>=Rs 1000 sold under brand name OR 0% w/o CENVAT and 12.5% with CENVAT 480 companies rated by ICRA in spinning and weaving industry of over 57000 crore turnover, the excise incidence is only 1% as the chain is mostly cotton based. Source- ICRA BHARAT D SARAWGEE & CO.
  • 12. CURRENT TAX SCENARIO- VAT FIBRE YARN FABRIC Ready made Garments (RMG) NATURAL FIBRES 0% -6% 0% -6% 0% -6% 4% -6% MMF 4% -8% 4% -8% 4% -8% 4% -8% BHARAT D SARAWGEE & CO.
  • 13. CURRENT TAX RATES- PRODUCT WISE State and central Taxes Combined Textile CategoriesTextile CategoriesTextile CategoriesTextile Categories RNR (%)RNR (%)RNR (%)RNR (%) Khadi, cotton textiles (handlooms) 4.04.04.04.0 Cotton textiles 7.1 Woollen textiles 9.3 Silk textiles 9.6 Art silk, synthetic fibre textiles 10.2 Jute, hemp, mesta textiles 9.0 Carpet weaving 5.6 Readymade garments* 10.5 Miscellaneous textile products 12.0 All SegmentsAll SegmentsAll SegmentsAll Segments 9.39.39.39.3
  • 16. Textile Input Goods Non Textile Input Goods Capital Inputs Input Services VAT/CST ED, VAT/CST /BCD,CVD,SAD ED,VAT/CST CGST, SGST/IGST CGST, SGST/IGST CGST,SGST/ IGST/BCD,IGST ST CGST, SGST/IGST FIBRE Mills/Powerlooms Current Taxes GST Regime Credittable in GST GST ON VALUE CHAIN OF NATURAL (COTTON) FIBRE Textile Input Goods Non Textile Input Goods Capital Inputs Input Services VAT/CST CGST, SGST/IGST ED,VAT/CST CGST, SGST/IGST ED, VAT/CST /BCD,CVD,SAD CGST,SGST/ IGST/BCD,IGST CGST, SGST/IGST ST ED,VAT/CST CGST, SGST/IGST Apparel Factory Blocked Credit -Existing YARNFABRIC Assumed that all the players are on optional route of nil excise duty APPARELSTEXTILE ITEMS BHARAT D SARAWGEE & CO.
  • 17. Textiles even if placed in merit Goods, the proposed rate is high compared to 4%- 6% RNR for Cotton Textiles Blocking of Working Capital on account of payment of taxes Market highly price sensitive- Higher GST will increase price -detrimental to market share Input taxes blocked will be passed on to the consumer Removal of duty difference in Integrated Mills and Power looms -Promotion of Process Integration and earning of economies of scale Difficult to break Tax Net- Exemption limit is only Rs 10 lacs IMPACT BHARAT D SARAWGEE & CO.
  • 18. Incentive to Modernisation- Cost of Input Capital Goods will be lowered to the extent of input Credit Compliance simplification- One Tax one law Incentive to deal with GST compliant suppliers, as Input Credit not taken by the non complied supplier will add to the cost IMPACT BHARAT D SARAWGEE & CO.
  • 20. Fibre Neutrality in Textile Eco System- Similar duties for the industry with no differentiation to Natural fibres Level Playing Field- will be competitive with Cotton textiles in line with World market scenario Encouragement for production of MMF against Cotton Huge Boost for increase in Export Market- Heavy demand for MMF Import of Machinery will become cheaper as credit of IGST will be available against earlier non utilization of CVD- incentives of Duty refund on Capital goods available in Natural Fibres only IMPACT BHARAT D SARAWGEE & CO.
  • 21.
  • 22. Export to be classified as Zero rated Supply Input Credits on goods and services will be available as refund Duty Drawback Scheme existing will become defunct In case of Duty Drawback rates higher than input credit refund, profitability will be impacted Blockage of Working Capital for payment of taxes up front IMPACT BHARAT D SARAWGEE & CO.
  • 23. Imported fabric in country will become competitive on account of Credit of IGST against earlier non availment of CVD credit to importers Export boost on account of total refund of input taxes IMPACT BHARAT D SARAWGEE & CO.
  • 24. ED on MRP concept will be replaced by Transaction Value- subsidy Blocking of Funds in Interstate Stock Transfer Deletion of Entry tax from state list Elimination of CST underrecoveries for traders Elimination of state boundaries and paper work, leading to economic transportation and reduction in cost. Additional Monthly Returns Complex Credit mechanism, every state to have three credit pools. GENERAL IMPACT BHARAT D SARAWGEE & CO.
  • 25. Average RNR for Industry is approx is 9.3 with Ready made Garments being highest 18% Standard GST is very High for the sector , demotivation to Make in India strategy 12% GST for Merit Goods will also be higher compared to existing RNR All the items in the value chain ie textile inputs and outputs to carry similar rate for non blocking of credits Increased revenue for Government may be shared with the Industry in form of improved subsidy scheme Standard GST rate of 18% may Dis incentivize Exports REPRESENTATION BY THE INDUSTRY BHARAT D SARAWGEE & CO.
  • 26. Difficult to bring Small Scale units and unorganized sector under Tax Net- (Around 5 lacs powerloom units and and knitting units in India under Unorganised sector) Huge Compliance to be made by SSI units , not doing any compliance in current scenario Sharp Increase in price of Cotton Garments CHALLENGES BHARAT D SARAWGEE & CO.