1) Impact of GST on Cotton Textiles Industries

Presently Cotton Textile Industry is exempt from Central Excise Duty and also
Fabric is exempt from VAT/CST. Therefore present impact of all central and
state taxes and duties i.e Excise / Service Tax/ VAT / CST on our Input Cost are
2.5% to 3% of finished product. But it will increase to 5% to 6% of finished
product cost considering the GST Rate on Cotton Textile @5% (CGST +
SGCST) under GST.
GST is beneficial for us due to ITC will available on Inputs and Inputs Services,
which is presently forgone due to prevailing exemption on fabric.
Main Concerns under GST regime are,
a. Cotton Textile Industry should be categorized in lower tax rate @ 5%
instead of 0%. It is under discussion that cotton textile product should
continue enjoy the exemption which is again loss to us.
b. Duty Drawback rate should increase considering GST rates and equally
beneficial as present. Presently we have Duty Drawback rate @ 7.5%
on FOB value in the exemption period. Our duty forgone on Input and
Input services are @ 2.5% to 3% on FOB value.
c. Under GST, ITC credit not available on Natural Gas. It is used for
generating Steam and Oil heating. Present cost of VAT @15% on NG is
Rs. 90 Lacs Per annum.
2) Impact of ATUFS on Cotton Textiles GOI has approved new scheme ATUFS to boost textile sector with more
benefits. Implementation period of scheme is from 13/1/16 to 31/3/22.
Under the scheme, there will be two broad categories:
a. Apparel, Garment and Technical Textiles, where 15 percent subsidy
would be provided on capital investment, subject to a ceiling of 30
crores rupees for entrepreneurs over a period of five years.
b. Remaining sub-sectors would be eligible for subsidy at a rate of 10
percent, subject to a ceiling of Rs.20 crores on similar lines.
3) Impact of Special Package announced for Made-ups sector -

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has
given its approval to the reforms to boost employment generation and
exports in the Made-ups Sector on 8 th December,2016. Notifications are yet to
be issued.

The following interventions have been approved in a time bound manner

within the approved budget of Rs. 6,006 crores for the apparel package with
the objective of creating large scale direct and indirect employment of up to
11 laces persons over the next three years in the made-ups sector:1

Providing production incentive through enhanced Technology

Upgradation Fund Scheme (TUFS) subsidy of additional 10% for Madeups similar to what is provided to garments based on the additional
production and employment after a period of 3 years.

Extension of Pradhan Mantri Paridhan Rozgar Protsahan Yojana

(PMPRPY) Scheme (for apparel) to made-ups sector for providing
additional 3.67% share of Employer's contribution in addition to 8.33%
already covered under Pradhan Mantri Rozgar Protsahan Yojana
(PMRPY) for all new employees enrolling in EPFO for the first three
years of their employment as a special incentive to Made-ups sector.

Extension of Rebate of State Levies (ROSL) (for apparel) Scheme to

made-ups sector for enhanced Duty Drawback on exports of Made-ups.
Presently rate of ROSL on Apparels of cotton are @3.5% per Piece on
FOB value. It will increase our revenue by Rs. 775 Lacs Per annum on
export of Rs. 2250 Lacs per annum.

Simplification of labour laws:

Increasing permissible overtime up to 100 hours per quarter in

Made-ups manufacturing sector,

Making employees' contribution to EPF optional for employees

earning less than Rs 15,000 per month.

4) Impact of New Trade Agreement with EU The Textile Ministry is strongly in favour of a free trade agreement
(FTA) with the European Union to enjoy preferential treatment and tax
benefits. Once an FTA between India and the EU is in place and
exporters from India too get tax preferences, it would be easier to beat
competition from Bangladesh.
5) Power purchase through Open Access
Presently GEB power cost is Rs. 7.70/- per unit and it is 11% cost of our
turnover. Since March 2014, power purchase through open access has
discontinued and One/Two supplier in DGVCL for bilateral agreement.

Power purchase through open access will start once the capacity of
transmission line has increased. GETCO is working on increasing the
transmission line capacity of Jambua to Asoj to Jhagdiya and Jambua to
Achaliya to Jhagadiya sub station and may complete before June 2017.
Once open access has started, we can buy power through exchange and save
cost approx. Rs. 1.10/- per unit.
Presently we are buying power 7.8 MW under Medium Term Open Access and
save cost of Rs. 0.35/- per unit.