Players in the textile sector are likely to soon get relief. Well placed sources said that soon a new order, a draft copy of which is doing rounds in social media, will be passed that will allow a refund of pending tax credit of Goods and Services Tax (GST). The pending refunds are worth thousand or crore of Rupees. An earlier order by the government provided that the pending tax credit will lapse on July 31.The order disallowed refund of accumulated input tax credit on account of inverted duty structure (when the tax on raw material is higher than that of the final product) on about ten categories of fabrics. It had created a hue and cry in textile sector. It was also not clear which credit will lapse? Players and tax experts made a series of representations to allow refund of tax credit and clear the air on other matters.Sources in the know of things said that most of the questions raised by the industry are likely to be addressed in the revised notification.
A well-placed source told DNA that almost all legitimate concerns related to input services, tax on capital goods, exports and even stocks are likely to be refunded, which will be a major relief for the sector. Naresh Sharma, president of Ahmedabad Textile Processors Association hopes that soon a notification should be out. “We are happy that our pending tax credit will not get lapsed. This will ease the liquidity situation in the market. Textile players will benefit from it,” said Sharma.