Raja M Shanmugham
President, Tiruppur Exporters' Association

The Department of Revenue had notified GST at 12% on MMF, MMF yarn, Fabrics and Apparel including Job working activities like Dyeing and Printing on 18th November 2021 which was to come into force from 1st January 2022. Our Association after having discussions with all stakeholders in Tirupur made a representation to the respective Minister of Central and State Government to recommend for maintaining the status quo after taking into account the concerns of MSMEs. After consideration of the trade, the GST Council has deferred the decision to change the rates in Textiles originally recommended in the 45th GST Council meeting and consequently, the existing 5% GST rates in Textile Sector would continue beyond 1st January 2022. We thanked Smt. Nirmala Sitharaman, Hon’ble Union Minister of Finance and Minister of Corporate Affairs, Shri. Piyush Goyal, Hon’ble Union Minister of Textiles and Thiru. Palanivel Thiagarajan, Hon’ble Minister for Finance and Human Resources Management for considering the requests of Industry stakeholders.

In the yarn price front, we have represented to the Shri. Piyush Goyal, Hon’ble Union Minister of Textiles and Commerce on 1st January 2022 requesting for his immediate intervention to curb the increasing of Cotton yarn prices after noting down our support for the cotton-producing farmers getting better price for their produce of cotton and added that then only, they would get encouraged to continue to raise the crop in the subsequent years. We pointed out that in the actual scenario, the middle man, traders were only creating a havoc by sky rocketing price of cotton to the hilt, which is unprecedented one during the cotton arrival season, ultimately destructing the value added coupled with employment generating garment sector significantly.

We specifically noted that the 11% total import duty existing on cotton has been the reason for the cartelization of vested players to increase the domestic cotton prices, making an abnormal profit at the cost of value added garment sectors. We have requested for removal of duty imposed on cotton immediately mainly to protect the garment sector, need to take necessary steps to break the cartelization and also for imposing ban on cotton exports. Another requisition was either for calibration of Cotton yarn exports or Ban on Cotton yarn exports till the situation comes to normalcy. We also mentioned our apprehension that the price hike of cotton do heavily impact the garment exporting units, lead to lose of exports including employment and doubtfulness on the sustainability of the MSMEs garment units. We hope the Hon’ble Minister would take a balance view and support for our cause.

We have also sent requisition letter to Textile Mills Associations to advise their members to revise the price hike downwards and to fix the reduced yarn rate in proportion to the cotton price hike.

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