The Indian apparel exporter representative, Apparel Export Promotion Council (AEPC) has urged the government for an increment in the duty drawbacks of about 4 to 4.5 per cent to lessen embedded taxes paid by the exporters.

After the implementation of the goods and services tax (GST), the exports of apparel have declined due to lowering of the duty drawback rate to 3.7 per cent from 11 per cent and non-disbursement of the drawbacks.

“We are paying embedded taxes in products like seeds, besides electricity duty and taxes on diesel, but are unable to recover them, which is weakening our competitiveness,” AEPC chairman H K L Magu said. He said if the government agrees to their demand of raising the duty drawbacks or GST refunds, it would translate to around Rs. 5,000-crore boost for the sector. In the first nine months of the current fiscal, the garment sector registered a decline in exports compared to the last fiscal.

It is only since October that things have started looking positive, as demand is rising and GST refunds have started getting released, Magu said. He said fiscal 2018-19 is likely to be flat for apparel exports at about 17 billion US Dollar if the growth trend sustains for the remaining months.

The month of November saw a jump of 20 per cent in rupee terms and 9 per cent in dollar terms compared to November 2017, he added.

– Apparel and Textile News, Apparel Talk, Indian Apparel