Tirupur, the knitwear hub of India, has been receiving frequent calls from international buyers since the day new tax regime – Goods and Services Tax (GST) was implemented by the Central Government.
Many of the foreign buyers are only partially aware of the benefits of GST levied on knitwear. They want clear information on the matter from officials of the Tirupur Exporters Association (TEA). However, the buyers appear to be optimistic and feel GST would benefit them as the price of the products would come down as per new slabs.
Since TEA officials are still trying to get familiarised with the new taxation system, they feel caught between the buyers and the suppliers. “Our suppliers are confused. They approach us and when we need clarification we go to tax officials. But even they cannot give us the solution. They refer to the higher authorities,” a TEA official was quoted as saying by a leading business newspaper.
It’s quite clear that the foreign buyers are looking for a price cut after the execution of GST. The industry also expects a surge in sales of readymade garments (below Rs. 1,000) post-GST. However, the impact of the new tax regime can only be measured after three months when the GST Council undertakes the revision process. For now, it will continue to be a cumbersome task for textile and apparel hubs like Tirupur, to assure buyers of the benefits and positive influence of GST on the overall business.If in any case, the country fails to draw a clear picture on GST, the buyers will shift to Bangladesh, which is already offering products at cheaper rates.
