Lok Sabha Question No. 3257 (UNSTARRED), answered on 2019-07-12
Subject: Effect of GST on Textile Sector
Ministry: TEXTILES
Asked by: A.K.P. Chinraj

## EFFECT OF GST ON TEXTILE SECTOR

## 3257. SHRI A.K.P. CHINRAJ:

## Will the Minister of TEXTILES वस्त्र मंरी

be pleased to state:

(a) whether the Government is aware of the  fact that  large  number  of  textiles/garment factories  have  shut  down  in  Tiruppur  after  the  introduction  of  GST,  if  so,  the  details thereof;

(b) whether  the  Government  is  also  aware  that  the  volume  of  export  of  garments  has drastically decreased;

(c) if so, the details thereof;

(d) whether any remedial steps have been taken or proposed to be taken to improve the textile business in Tiruppur;

- (e) if so, the details thereof; and
- (f) if not, the reasons therefor?

## उत्तर

## ANSWER

## वस्त्र मंरी ( श्रीमती स्मृ तत ज़ूबिन इरानी )

## MINISTER OF TEXTILES (SMT. SMRITI ZUBIN IRANI)

(a): No information is available about closure of textile/garment factory, if any, in Tiruppur after the introduction of GST.

(b) & (c): Export of apparel (in pairs) has shown an increase of 16% from 116 million units  in  2016-17  to  157  million  units  in  2018-19.  Export  of  total  textiles  and  clothing  has shown an increase of 2.7% from 35,666 US mn dollars in 2017-18 to 36, 627 US mn dollars in 2018-19.

(d) to (f): Government has been taking multi-pronged efforts through various schemes/programmes  for  expansion  of  textile  manufacturing,  infrastructure  development, upgradation of technology, supporting innovation, enhancing skills and traditional strengths in the  textile  sector  that  lead  to  improvement  in  textile  sector  in  the  country  including  in Tiruppur. The schemes and programmes,inter-alia include:-

- (i) A separate scheme for development of Knitting and Knitwear Sector was launched in  January  2019  with  an  outlay  of  Rs.47.72  crore  for  a  period  upto  31.3.2020to boost  production  in  knitting  and  knitwear  clusters  at  Ludhiana,  Kolkata  and Tiruppur.
- (ii) Government launched a Special Package of Rs.6000 crore in 2016 for garments and made-ups sectors. The package offers Rebate of State Levies (RoSL), labour law reforms,  additional  incentives  under  Amended  Technology  Upgradation  Fund Scheme ATUFS and relaxation of Section 80JJAA of Income Tax Act. The RoSL scheme has been replaced by the new RoSCTL (Rebate of State and Central Taxes and  Levies)  scheme  w.e.f  7 th March  2019  and  shall  remain  in  force  up  to 31.03.2020. The rates under Merchandise Exports from India Scheme (MEIS) have been enhanced from 2% to 4% for garment and made-ups, 5% to 7% for handloom and handicrafts w.e.f. 1 st November 2017. Products such as fibre, yarn and fabric in the  textile  value  chain  are  being  strengthened  and  made  competitive  through various schemes, inter alia, Powertex for fabric segment, ATUFS for all segments except spinning, Scheme for Integrated Textile Parks (SITP) for all segments, etc. Assistance  is  also  provided  to  exporters  under  Market  Access  Initiative  (MAI) Scheme.  Government  has  enhanced  interest  equalization  rate  for  pre  and  post shipment credit for exports done by MSMEs of textile sector from 3% to 5% w.e.f. 02.11.2018. Benefit of Interest Equalization Scheme has been extended to merchant exporters  from 02.01.2019 which  was  earlier limited to only manufacturer exporters.
- (iii) Amended  Technology  Upgradation  Fund  Scheme  is  being  implemented  to upgrade technology/machinaries of textile industry with an outlay of Rs.17,822crore during 2016-2022  which will attract investment of Rs.1 lakh crore and generate employment in the textile sector by 2022.
- (iv) Under  the  Scheme  of  Integrated  Textile  Park  (SITP),  Government  provides  40% subsidy    with  a  ceiling  of  Rs.40  crore  to  set  up  Textile  Parks  for  infrastructure creation and employment generation.
- (v)   As a part of Government's focus on skill development and employment generation in the  textile  sector,  Government  is  implementing  the  'Samarth  -  Scheme  for Capacity Building', to train 10 lakh youth for a period of three years from 2017-18 to 2019-20, at an estimated cost of Rs.1300 crore.

Apart  from  the  aforesaid  programmes,  Government  has  been  implementing various  schemes  for  promoting  investment,  production,  employment  generation  and  for boosting  exports  in  the  textile  sector.  These    includePowerTex  India  Scheme  -  for Powerloom Sector Development,   Silk Samagra- the integrated silk development scheme, Integrated  Processing  Development  Scheme  (IPDS),    North  Eastern  Region  Textile Promotion Scheme  (NERTPS),    Incentive Scheme  for Acquisition of Plants and Machinery (ISAPM) for Jute Industry and Jute Diversified Products Manufacturing Units, NHDS for handloom and handicraft sectors, etc.