While GST is hitting the headlines, on Wednesday, Haryana Chief Minister Manohar Lal Khattar said the implementation of the Goods and Services Tax (GST) is not going to terribly affect the textile business.
“Textile has been placed in the slab of 5 per cent under the GST. Presently, there is an embedded tax of central excise duties of 3.38 per cent and 2.8 per cent of VAT on cotton yarn,” he said. Therefore, the 5 per cent tax on fabric is not going to put an additional burden on textile, Khattar claimed.
Speaking at a seminar on GST for members of Legislative Assembly and officials, he said, “Moreover, the cascading effect would be mitigated with the event of the GST and the net effective tax on fabric would be minimal”. The CM further claimed that the annual average rate of inflation is between six to eight per cent and the minimum tax burden that might fall on textile is not going to hamper the sector.
He said that the GST would bring together traders integrating the chain of supply of textile, promoting accounted business and transparency.
“Though the process of implementing the GST was initiated long ago, it was the strong leadership and will power of Prime Minister Narendra Modi that made it has become a reality after 31 years,” he said.
The GST would bring about a “revolutionary” change in the taxation system by amalgamating various taxes, including VAT, Central Excise and Service Tax, he said. The chief minister called upon the administrative secretaries and department heads to be fully prepared to meet requirements of the GST.
Stressing on the need to shun tax evasion, he said, “There is a need to inspire the confidence of the people in our governance and by doing so we could motivate the people towards discharging their lawful responsibilities.”
“Apart from this, we should ensure that every single penny of public money is utilised for the development of the state,” Khattar said.