The textiles industry today said the rates decided by the GST Council will benefit the entire value chain, even as exporters urged the government to continue the rebate on state levies scheme.
The GST Council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts, on Saturday decided on tax rates for six goods including footwear, textiles, biscuits and gold.
Natural yarn will be taxed at 5 per cent, while man-made yarn will be taxed at 18 per cent, readymade garments will attract 12 per cent tax, whereas no tax will be levied on jute.
"The entire textiles value chain will benefit and the inflation in apparel will come down, thereby benefiting the buyers," Confederation of Indian Textiles Industry Chairman J Tulasidaran told PTI.
"The rate of 5 per cent for cotton textiles is very progressive and will lead to the growth and development of the entire value chain," said Ujwal Lahoti, Chairman of the Cotton Textiles Export Promotion Council.
Apparel Export Promotion Council Chairman Ashok G Rajani said industry was looking forward to a simplified tax regime under GST with a single rate for the entire value chain, therefore the multiplicity of rates will lead to interpretational issues.
"We hope that Government will take care of this segment's interest by continuing rebate on state levies and draw back rates," Rajani said.
The Goods and Services Tax (GST), to be rolled out from 1 July, will unify 16 different taxes and make India a single market.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)