GST Blues: fall in garment export by 41 per cent, mixed opinion in industry over causes
New Delhi: With news reports surfacing over the drop in the volume of exports of the ready-made garments that involves a major chunk of the Micro, Small and Medium Enterprises (MSMEs), in the month of October by over 41 per cent, there is mixed opinion among exporters over the possible reasons of the slowdown.
Talking to KNN, Dharmendra Joshi, Secretary General of the Gujarat Chamber of Commerce and Industry (GCCI) explained the situation.
Joshi opined that there is visible slowdown in the overall volume of exports across sectors including the textile sector. Joshi added that the reasons behind the slow figure can be because of a steep international demand.
Commenting over the impact of the Goods and Services tax (GST) with regard to the slowed exports, Joshi said that the new taxation is complicated and it is likely to take time for the traders and exporters to get along the new regime.
He however maintained that the GST could factor as one of the reasons behind the fall in exports, but it can’t be singled out as the only reason for the same.
“Globally there is a slow demand of commodities across sectors, GST may have proved to be one of the hurdles, and however it is not the only reason for the fall” Joshi said.
Earlier, export body Federation of Indian Export Organizations said that the exporters were badly hit by the new taxation despite the positive trend of demand in the global market.
The main reason for the same was the capital crunch that began to rise with the GST mechanism functioning in a nasty manner.
The GST refund for tax paid on exports during the early months of the implementation continued to face complications despite the government time and again assuring that it will even tually go smooth, resulting in a big blow to the sector in total.
Source- Knn India.