South Indian Government: Textile industry export tax rebates will increase

The Chairman of South India SIMA has stated that the tax rebate rate for dyed knitted fabrics will be revised from 4.9% to 5.1%. In addition, the tax rebate rate for blended clothing has also been increased from 8.9% to 9.5%… The increase in tax rebate rate has become a general trend.
Trajkumar, chairman of the South India Textile Mills Association (Sima), welcomed the decision of the Export Tax Rebate Committee. The government has announced an increase in the tax rebate rate and value ceiling for textile and apparel products.
The Tax Refund Committee is recommended to increase the tax refund rate applicable to most textile and apparel products from November 22, 2014. This recommendation is made after feedback from various textile export promotion committees and after taking into account the taxes currently endured.
Trajkumar thanked the committee for fully considering the suggestions put forward by sima on tax rates for cotton yarn, spandex woolen yarn and fabrics, and welcomed the revision of individual tax rates for yarns with counts of 50 and above.
Earlier, in the new tax rate, cotton yarn was the only one that met the conditions for an individual tax rate of 3% when the value limit was 13 rupees per kilogram. The tax rate for yarns with counts below 50, 50 and above was also retained. The tax rate has been revised is 2.8% and the value is capped at Rs 18 per kg.
Trajkumar believes that although some yarn counts such as 50 and 60 may be affected by the revised tax rate, ultra-fine count yarns such as 80 and above will benefit. Similarly, the individual tax rate of 4.7% on spandex slub yarn when the value is capped at Rs 16 per kg will help exporters increase their competitive advantage.
“The stable export growth of spandex woolen yarn and the revised tax rate will help increase exports.” He said.
The tax rebate rate for cotton gray fabrics has been reduced from 4.4% to 4.3%, but the value limit has been increased from 24.50 rupees per kilogram to 37.00 rupees. In the case of dyed fabrics, the rebate rate has been increased from 4.9% to 5.0%, while the value limit has also been increased from 31.50 rupees to 50.00 rupees per kilogram.
Chairman sima has stated that while the same rebate rate for gray fabrics has been retained, the rebate rate for dyed knitted fabrics has been revised from 4.9% to 5.1% and the marginal increase in the value cap has been increased from 31.50 rupees to 33.00 rupees per kilogram.
The tax rebate rate for cotton garments has been slightly reduced from 7.6% to 7.5%, while the value limit has been significantly increased from 56.70 rupees to 75.00 rupees per kilogram. For blended garments, the tax rebate rate and value limit have been increased from 8.9% to 9.5% respectively, and the rebate rate has been increased from 58.10 rupees to 90.00 rupees per kilogram.
The tax rebate rate for artificial garments has also been slightly reduced from 10.2% to 9.8%, but the value limit has been increased from Rs 59.50 per kg to Rs 93.00 per kg.
Chairman SIMA added that raising the value cap will encourage value increases at a time when there is a current need to promote exports, capture international markets and narrow the gap in the balance of payments.