NEW DELHI: The government stepped in to provide a boost to ready-made garments and made-ups to help manufacturers tide over the adverse impact of GST and provide a thrust to shipments of these two major segments of the textiles sector ahead of Gujarat elections.
On Friday, it doubled incentive under the Merchandise Exports from India Scheme (MEIS) to 4%, a source said, while refund of state levies will be increased to 1.6% over next few days, compared to 0.9% now. The benefits had been reduced after GST was rolled out and exporters have been bitterly complaining about massive job losses and closure of units due to loss of competitiveness. With restoration of a large part of benefit - as reported first by TOI on October 28 - exporters can hope to compete more favourably Vietnam, Bangladesh and others from which global buyers source products.
The export of ready-made garments had declined by nearly 40% to $829 million in October. The move on MEIS is expected to cost the exchequer a shade under Rs 1,150 crore during the current financial year and Rs 685 crore in 2018-19, the commerce department said. "This measure will incentivise the exports of labour intensive sectors of ready-made garments and made ups and contribute to employment generation," a statement said.
Under MEIS, the commerce department offers duty benefits of 2-5%, depending upon the product and country.
Exporters in Gujarat are unhappy with GST and withdrawal of some of the facility . Polling in the state is scheduled for December 9 and 14.
Source: timesofindia.indiatimes.com