Lok Sabha Question No. 685 (UNSTARRED), answered on 2018-12-13
Subject: Problems faced by Textile Industry
Ministry: TEXTILES
Asked by: SRIRAM MALYADRI

## LOK SABHA UNSTARRED QUESTION NO. 685 TO BE ANSWERED ON 13.12.2018

## PROBLEMS FACED BY TEXTILE INDUSTRY

## 685.   SHRI MALYADRI SRIRAM:

Will the Minister of TEXTILES वस्त्र मंरी be pleased to state:

- (a) whether  the  number  of  textile  companies  which  have  defaulted  in  making payments to banks have increased recently, if so, the details thereof and the reasons therefor during the last three years and the current year;
- (b)   whether there has been a sharp decline in drawback benefits available to the textile companies and if so, the details thereof; and
- (c)    whether  uncertainty  in  the  price  of  raw  materials,  lack  of  infrastructure  and recession  is  rendering  Indian  textile  companies  less  competitiveness,  if  so,  the details thereof and the reaction of the Government thereto?

## उत्तर

## ANSWER वस्त्र राज्य मंरी (श्री अजय टम्टा)

## MINISTER OF STATE FOR TEXTILES (SHRI AJAY TAMTA)

- (a) Around 306 textile units/accounts (as on April,2017) have defaulted in making payments  to  banks,    particularly  in  weaving,  knitting,    spinning,  garmenting  & Made-ups and composite/multi-activities  segments.  Reasons for default include ambitious expansion plans, venturing into non-core business areas, etc.
- (b) There  is  no  sharp  decline  of  duty  draw  back  benefits  available  to  textile companies i.e total of duty drawback and GST refund as compared with the higher rate  of  duty  drawback  available  for  the  textile  items  during  pre-GST  period.    A statement is given at Annexure-1.
- (c) Government has been taking various measures for development of infrastructure  facilities  to    make  the  textile  industry  more  competitive.  Under  the 'Amended Technology Upgradation Fund Scheme and In-Situ Upgradation  Fund scheme,  one-time  capital  subsidy  is  provided  to  the  textile  units/weavers  for installation/upgradation  of  textile  machinery.  Under  the  scheme  of  Integrated Textile Parks (SITP), the textile industry is provided with infrastructure facilities. To promote  domestic  manufacturing,  Government  has  recently  increased  the  basic custom duty from 10% to 20% on import of MMF fabric, silk fabric, carpets, apparel and made-ups.

## Annexure-1 is reply to part (b) of the Lok Sabha USQ No.685 for answer on 13.12.2018 regarding 'Problems faced by Textile Industry'

## Annexure-1

| Drawback Rate for textile products (% of FOB)                                | Drawback Rate for textile products (% of FOB)                | Drawback Rate for textile products (% of FOB)                     | Drawback Rate for textile products (% of FOB)                | Drawback Rate for textile products (% of FOB)   |
|------------------------------------------------------------------------------|--------------------------------------------------------------|-------------------------------------------------------------------|--------------------------------------------------------------|-------------------------------------------------|
|                                                                              | 2016-17                                                      | 2016-17                                                           | 2017-18                                                      | 2017-18                                         |
| Description (Tariff items as per Schedule of All Industry Rates of Drawback) | Drawback Rate (Lower) (Customs+ Central Excise duty on fuel) | Drawback Rate (Higher) (Customs+ Central Excise duty+Service Tax) | Drawback Rate (Lower) (Customs+ Central Excise duty on fuel) | GST Refund rate(Central Excise and Service Tax) |
| Cotton Yarn Grey (520501)                                                    | 1.2                                                          | 3                                                                 | 1.2                                                          | 5                                               |
| Cotton Yarn Dyed(520504)                                                     | 1                                                            | 3.5                                                               | 1                                                            | 5                                               |
| Cotton Woven fabrics Grey(520801)                                            | 1.6                                                          | 4.3                                                               | 1.6                                                          | 5                                               |
| Man's or boy's shirt of cotton (610501)                                      | 2                                                            | 7.6                                                               | 2                                                            | 5/12*                                           |
| T-Shirts of cotton(610901)                                                   | 2                                                            | 7.6                                                               | 2                                                            | 5/12*                                           |
| Blankets and traveling rugs of cotton (630101)                               | 2                                                            | 7.5                                                               | 2                                                            | 5/12*                                           |
| Polyester texturised/twisted yarn Grey(540201)                               | 1.7                                                          | 11.1                                                              | 1.7                                                          | 12                                              |
| Polyester texturised/twisted yarn Dyed(540202)                               | 2.3                                                          | 12.2                                                              | 2.3                                                          | 12                                              |
| Woven fabric of Artificial filament yarn Grey (540801)                       | 1.5                                                          | 7.5                                                               | 1.5                                                          | 5                                               |
| Woven fabric of Artificial filament yarn Dyed(540802)                        | 1.8                                                          | 8.2                                                               | 1.8                                                          | 5                                               |
| Man's or boy's shirt of MMF (610503)                                         | 2.5                                                          | 9.8                                                               | 2.5                                                          | 5/12*                                           |
| T-Shirts of MMF(610903)                                                      | 2.5                                                          | 9.8                                                               | 2.5                                                          | 5/12*                                           |
| Blankets and traveling rugs of MMF (630103)                                  | 2.4                                                          | 9.5                                                               | 2.4                                                          | 5/12*                                           |

*where retail sale value not exceeding Rs 1000 per piece are subject to 5 % of IGST and where retail sale value is exceeding Rs 1000 per piece, they are subject to 12% of IGST

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