Government considering more concessions to exporters
including a likely reduction of rates on finished carpets and expanding the list of duty-free imports of essential embellishment to make them competitive in the international market.
The carpet industry had demanded the duty to be brought down from the existing 12% to 5% to make Indian carpets competitive internationally. The proposals are being worked out by the Ministries of Finance and Textiles after a marathon meeting Finance Minister Piyush Goyal and Textiles Minister Smriti Irani had with representatives of various export promotion councils and industry captains recently.
The J&K and Uttar Pradesh Governments had made a strong case for concessions and the decision to reduce rates was on the table at least since last November.
The Government is concerned over the fact that since October last year, exports of ready-made garments have significantly declined. It was found that the introduction of GST had “unintended consequence” of reducing tax refunds by 5-7% as compared to the pre-GST period, making Indian apparel uncompetitive in the international market, a top functionary privy to the meeting said.