Raising serious concern of a whopping six million jobs loss in the garment sector if urgent remedial measures were not taken, the garment exporters have demanded the restoration of duty drawback and Remission of State Levies (ROSL) rates to pre-goods and services tax (GST) levels. Ready-made garment exports dipped about 40 percent to $829.44 million in October.
Before the GST roll out, the average duty drawback that they were getting was 11.5 percent and the Remission of State Levies (ROSL) was an average of 3.5 percent. After the new indirect tax regime implementation, the average drawback has come down to 2.25 percent from 11.5 percent. Garment exporters alleged that the government was making it difficult for them to run their businesses and they had to incur additional compliance costs due to the ‘tardy implementation’ of the GST.
The exporters demanded speedy conclusion of a free trade agreement with Europe for India to regain its export competitiveness, as the industry had to pay 9.8 percent duty for shipping to Europe. They also demanded clarity on the e-wallet mechanism, full refund of blocked taxes and that fabric and other inputs be made available to the garment industry at lower rates. Besides, the country’s exporters are facing intense competition from countries like Bangladesh, Pakistan and Vietnam, due to lower competitiveness.