Views:0 Author:Site Editor Publish Time: 2019-06-25 Origin:Site
Removal of import duty on man-made fibres (MMF) and reduction of goods and services tax (GST) on it from 18 per cent to 12 per cent and fixing of corporate tax rate for large companies at 30 per cent including surcharge and cesses are part of the pre-budget suggestions made by the Southern India Mills Association (SIMA) to the Confederation of Indian Textile Industry (CITI).
Large companies are defined as the ones with a turnover of more than ₹50 crore. Though the tax rate for such units is only 30 per cent now, the surcharge and cesses add up to 34.94 per cent.
The Central Board of Indirect Taxes and Customs (CBIC) had allowed refund of accumulated credit on account of inverted duty structure to fabric manufacturers. However the input tax credit (ITC) accumulated on account of GST paid on capital goods and input services are not be eligible for refund.
SIMA feels all services attract 18 per cent GST and denying the refund of GST on such services makes the provision unrealistic and does not seem to serve the purpose. Hence, it has suggested allowing refund of accumulated GST in services.
Before the GST regime, exporters were allowed to utilise the Merchandise Exports from India Scheme (MEIS) scrip for the payment of all taxes like –excise duty, service tax, value-added tax and basic customs duty. However, with the introduction of the GST, the government has permitted the use of such scrip for the payment of basic customs duty only. This has resulted in minimal usage of the duty scrips.
So SIMA wants the government to consider allowing the usage of the MEIS scrips for payment of integrated GST and continue the same till other export benefits are phased out as per pact with the World Trade Organisation.
The association also suggested provision of adequate funds to clear the long pending Technology Upgradation Funds Scheme (TUFS) subsidies of committed liabilities of over 9,000 cases as per the recommendations made by the office of the textile commissioner.