Viewpoint | February 2015
Speed Up GST
The taxation of goods and services in India has hitherto been characterised by multiplicity of rates and this has left the industry and service providers at a disadvantageous position in the global market. To simplify the tax structure and to make the economy competitive, the Government had decided to introduce Goods and Services Tax (GST) from April 1, 2010, said a statement from the Government half a decade ago. Much water has flown under the bridge since that announcement. GST is still awaiting to see the light of the day. Now it is declared that GST will be introduced in 2016 but till date the constitution bill is only cleared from only one House of the Parliament and it is still to be cleared by the Rajya Sabha. After that it has to be ratified from the half of the State assemblies.
Textiles industry is an important segment of Indian economy. The sector which was once the pride of India is now losing its share in the world market to smaller countries like Bangladesh, Vietnam, Pakistan etc. India will be the world´s No. 1 cotton grower this year, elbowing out China from the top spot for the first time in over 30 years. Cotton output next year is pegged at 39.63 million bales, but experts believe production could be as high as 41 million bales as the area under cultivation has gone up this year. India´s local textiles market is expected to grow to $65-$68 billion in coming years from the current $60 billion. While exports are expected to rise from India, China, with textiles and apparel exports worth $270 billion, is expected to remain a dominant player. In this context, it is important that the Indian Government provides a suitable tax structure to this sector which increases its competitiveness and helps in achieving higher global market share. So, the sooner GST becomes a reality, the better will be the future of textile in the country.
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