India’s GST may cause chemical fiber prices to rise
According to reports from domestic weaving factories and traders in India, India imposes an 18% GST (goods and services tax) on chemical fibers and chemical fiber yarns, while only charging a 5% GST on cotton and cotton yarns, which will lead to an increase in the price of chemical fibers in India. The costs of downstream manufacturers increase.
The Federation of Indian Textile Industry stated that the competitiveness of Indian textiles in the international market has been significantly weakened. The chemical fiber tax rate under the new tax system is 18%, which will greatly affect the operations of small and medium-sized chemical fiber companies in India. It is hoped that the government will lower the chemical fiber GST to 12%.
Texprocil said that the unified tax system is good news for the Indian textile industry. The 5% GST on cotton will be absorbed in the industrial chain and will not increase the price of Indian textiles. It is understood that the current tax on chemical fiber yarn in India is about 0.7-0.8 rupees/kg. Under the GST tax system, the tax on chemical fiber yarn is 2.5-5 rupees/kg. The 18% GST will have an impact on downstream weaving factories, but it will be fully absorbed by the garment factories. In addition, if the GST can be refunded in time, it will not have a negative impact on clothing exports. India’s GST may cause chemical fiber prices to rise
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