ASTUDYOFTHESCOPEOFTEXTILESINDUSTRYINUTTAR PRADESHAFTERGST
ABSTRACT
TheGSTisregardedasadestination-basedtaxappliedontheconsumptionofavarietyofproductsandservices,Setoffispermittedintheformofinputtaxcreditsto business parties involved in those processes.The GSTis levied at every stage of production up until the final consumption is made.Almost two thirds of the raw materialsandrelatedtextilegoodsthatUttarPradeshpurchasedcamefromotherstates.Asaresult,itisparticularlysignificanttoUttarPradesh'seconomy Thetextile industry and its supporting manufacturing businesses offer the second-highest number of job opportunities after agriculture. Employment sector with enormous potentialforstatedevelopmentinthetextileindustry TheStatehasahighdemandforemploymentcreation.UttarPradeshbeingthemostpopulatedstateinIndia,has asizablemarketfortextilegoods.TherearenumerousprospectstoestablishacottonindustryintheStateinordertoaddressthisneed.Thegoalofthispolicyisto increase employment prospects in this industry while also enhancing the nation's manufacturing base. We will talk about the current, difficulties, and enormous opportunitiesinthetextilesectorforbothproductionandconsumptioninthisessay.
KEYWORDS:GDP,GSTCOUNCIL,MEIS,MAI
INTRODUCTION
GSTisconsideredasoneoftheimportanttaxreformsinthehistoryofIndianTaxationsystem.IthasverymuchaffectedalmostallthesectorsoftheIndianeconomy textileindustryisoneofthemostout-performingindustriesinIndia.Itcontains2ndlargestpopulationinworld.Asanoutsizedsectoritplaysafulloflife rolewithintheeconomywithmarketsizeextraordinaryinbillionUSDandadditionallyregardingGDP,employment,exportpromotion,etc.It'soneamongthe oldestproducingbusinesswithinthecountryandsecondlargest,whenagriculture.ThecontributiontoGDPisconcerningfivenothing,andthereforetheshare withinthecombinationexportsreachesupto100.TheIndiantextilebusinessis labourintensiveandisoneamongthemostimportantemployerswithacontributionof14%tooverallindexofbusinessProduction(IIP).Thisstudyfocusedon the result of modern taxation framework referred to as “GST started by the administrationonthetextilebusiness.
TheTextilebusinesshastwosegments:
Ÿ Organised- thissectorconsistsofspinning,garmentandthatusesfashionablemachineryandtechniques.
Ÿ Unorganised- The organised textile sector includes handicraft, handloom,smallscaleandmediumscalemills
Literaturereview:
Ÿ Anshu Ahuja (2017) in this paper study titled "Perception of people towardsGoods&servicetax"hasestimatedthattheGSTaregoingtobe fruitfulintheprocessofthereductionoftax.Itisalsobelievedthatitwill workasatransparencysystemandalittletoo.Theresearcherconcluded bysayingthatfarmersandthesmallbusinessmanshoulddefinitelyprovidewiththetaxrelaxation.
Ÿ Poorani&Dr J.Vidiya(2019)–Intheirresearchstudytitled"Astudyon customer's perception towards Goods and services Tax (GST)" have statedthat,GSTwilldefinitelyincreasethelevelofGDPandtheConsumerssatisfactionwiththefourtiersofGST TheConsumersareawareofthe GSTrates.Theperceptionoftheconsumersrevealedthatconsumershave positiveopinionamongstconsumers.
Objectiveofstudy:
Ÿ TheobjectiveofstudyistoknowabouttypesofGSTtaxonfabricsand typesofgoodsthathavedifferenttaxratesapplicable.
Ÿ To study for the unorganised sectors, government policies and schemes fortheexpansionoftextileindustryinUttarPradesh.
Researchmethodology:Thisresearchpaperisindescriptiveandanalyticalin nature,dataisusedassecondarydata.Sourcesarevarioustypesofnewspaper, researchjournals,articles,internetandGSTwebsitesthatinterperatetheimpact ofGSTonthetextileindustry
Analysis and discussion: Various fabrics rates- From January 2022, the GST rates on clothes overall was going to be fixed at 12% irrespective of value. It means that the GST rates on clothes of any value whether below Rs.1,000 or more than Rs.1,000 is 12%, compared to the earlier GST of 5% on garments priceduptoRs.1,000.GSTontextilesincludingwovenfabrics,syntheticyarn, pilefabrics,blankets,accessoriessuchastablecloths,serviettesortapestries,and
rugs was goingtobeincreasedfrom5%to12%.Butthisisnotnotifiedbythe GSTcouncil,sountilthentheexistingrateof5%continuestoapplyforthelower valueslabofRs.1,000orless.Further,aGSTof12%applieswherethevalueof garmentsismorethanRs.1,000.TailoringservicesattractGSTrateof5%under HSN code 9988. Rent out of clothes attractthe same rates as given above.The rateofGSTonstitchedandreadymadeclothesis5%.TheCouncilhaddecidedto reducetheGSTrateontailoringservicesfrom18%to5%.GSTonclothesranges between 5% to 12% depending upon the value. Further explanation has been givenbelow-
Explanation- The impact of this chart shows that the costlier product price become more expensive after limit and cheaper clothes are taxed at lower rate it means that the tax burden impact on the higher income level where as lower incomeconsumerstaxedarelowerrateintheabovebothcharts.
In previous time when the State was famous for its traditional industries like textiles,includinghandloomsandpower-looms,inthenationandalsoabroad.However, now a day the textile industry of Uttar Pradesh is struggling for its identity In order to renovate the textile industry of the State there is a dire need of technicalup-gradationandfreshinvestment.
InsteadofthemostpopulatedStateofIndia,UttarPradeshalsooffersthelargestconsumermarketinthecountry
Integrateddevelopmentofalargestateisimportantforthedevelopmentof thenation.Tomeetdemandofit,UttarPradeshprocuresabouttwo-thirdof rawmaterialandrelatedtextileproductsfromotherstates.
TheStateGovernmenthasbeenregularlytryingtorenovateitstraditional handloomandtextileindustryandthisU.PTextileandGarmentingPolicy 2017 has been prepared to achieve complete success in this endeavour. In backmentionedpolicycoversallsubbranchesoftextileindustrysuchassericulture(includingchaakiandkoyaproduction),reeling,handloom,spinning,weaving,knitting,texturizing,dyeing,processing,garmenting(i.e.garmentmanufacturing, embroidery, embroidered fabrics, made-ups, home textiles, fashion accessories,leathergarmentsandaccessories),andalltypesoftechnicaltextiles and jute products. Provisions have been prepared in this policy to give special incentivestoPoorvanchal,BundelkhandandMadhyanchalafterconsideringthe suggestions(inputs)receivedfromvariousindustriesintextilesectorandindustrial associations. This policy would encourage new investment in the textile
industryofthestateandgeneratelakhsofdirectandindirectemploymentopportunities.Tomadetextile,handloomandsericultureindustrysuccessfulandmeaningful,focushasbeenlaidonrationalisationoflabourlaws.
Duetoextraordinarypriceincreasesinrawmaterialslikeyarn,packingmaterials, and freight, the market is likely to experience a 15-20% price increase in clothinginthenearfuture.ThetraderslamentthefactthatindividualswhopurchaseclothingforlessthanRs1,000willbethemostaffected.
ClothtradersclaimedThattradingactivityhasbeenhamperedfortheprevious twoyearsbytheCovid-19pandemic,butisprogressivelyincreasing.Theyhad goodhopescomingwiththeyear2022-23,butthesamewasshatteredwiththe aboveannouncement.
ImportanthubsinUttarPradesh
UttarPradeshisplayingsignificantroleinthetextileproductionofthetotalproduction in Indian export and for domestic consumption. Bhadohi Varanasi MirzapurKanpurVaranasihasplayedakeyroleinthetextileproductioninUP, MajorclusterofhandmadecarpetsandsilksareesinIndia.
Important textile institution in UP- PNIFT Raebareli, UP textile institute KanpurandIndianinstituteofhandloomtechnologyVaranasi.
Government schemes forboosting textile industry- PM handloom weavers, Mudra yojana, Power loom development scheme and Cluster development programme.
Key policies to support- Capital investment subsidy, Interest subsidy, SGST return,Exportincentive
Keyplayerintextilemarket
FabIndia,Raymond,Arvind,ThreadsIndialtd,SevachikenLucknow
Keypoliciesobjectives
Attractinvestmentcreatenewjobopportunities,promotemakeinIndiaandmeet domesticdemandfortextiles,ensuringrapidavailabilityofskilledlabourintextileindustry
PoliciesfortextileindustryinUttarPradesh
LandSubsidyprovidedbythegovt.50%oflandcost(upto30%inGautam BuddhaNagardistrict)onlandpurchasefromStateAgencies.
Stamp Duty exemption for newly setup textile industry 100% (75% in GautamBuddhaNagardistrict).
SGSTrefundfor10yearsof90%oftaxtoMSMEunits,80%toMegaunits