Relief to Textile Sector & MSMEs
Relief to Textile Sector & MSMEs
To resolve the issues and challenges faced by the Textile sector and Micro, Small and Medium Enterprises (MSMEs), Union Minister for MSME, Shri. Nitin Gadkari pointed out the measures taken by the government to uplift both the sectors.
Setting the Goal for MSMEs
He stated that the GoI aiming to reach the 5 trillion dollar economy and to increase the GDP from 29% to 50%. To achieve the same, the MSMEs will receive flawless support, as it acts as the backbone of the Indian economy and force to increase employment, growth and exports.
He also said that the clusters, small-scale industries and research facilities would be set up to reduce the import bill, increase employment and rural economy and manufacture the goods that need to be imported.
Swift Actions from GoI
Addressing the key issues of the Textile Industry and MSMEs, Shri. Nitin Gadkari pointed out the following measures carried out by the government. They are:
Tax Burden and Compliance:
Corporate Tax: In the Financial Year 2016-17, the government reduced the corporate tax to 25 per cent for companies with a turnover of up to Rs.250 crores (covering 99 per cent of the domestic companies). For the Financial Year 2019-20, the government has proposed to increase the turnover slab to Rs.400 crores vide Finance (No.2) Bill, 2019.
Presumptive taxation: The threshold limit for applicability of presumptive taxation of business income has been increased from 1 crore to 2 crores.
For individuals and HUF (income): The threshold limit for maintaining the books of accounts part for individuals and HUF has been increased from 1.2 lakh to Rs.2.5 lakhs.
For individuals and HUF (total turnover): The threshold limit for maintaining the books of accounts part for individuals and HUF has been increased from 10 lakh to 25 lakhs.
Rebate for individuals and HUF: Rebate for individuals and HUF on Income tax has been provided on a total taxable income up to Rs.5 lakhs.
Section 80JJAA: The government has relaxed the employment requirement from 240 days to 120 days for seasonal manufacturers in apparel.
Reduction in GST Rates for Textiles Industry
Addressing the issues raised by the Textile Industry and Traders Associations to reduce GST rates on textile items, the Ministry of Finance has provided the following measures
- The government has decreased the GST rate of yarn, fabric garments and made-ups from 18% to 5%
- The government has decreased the GST rate of Handicraft items from 18% to 5%
- The government has decreased the GST rate of Corduroy, Velvet fabrics and other 8 items from 12% to 5%
- To create a competitive market nationally and internationally, the government allowed refund ITC on fabrics from FY 2018. This was revised from the previous MMR structure of 18% on fibre, 12% on yarn and 5% of fabric leading to a stranding 2 % tax.
The press release on the same is inserted below:
Relief to Textile Sector & MSMEs