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00:00This is the Textile Association and Secretary General of Polyester Textile Aperol Industry.
00:05Hi, Mr. Wich. Thank you so much for joining us today. Very good morning.
00:08You know, let's start by talking about the GST rate cut.
00:12How much of the benefit do you think will actually flow into the customers
00:15versus staying with manufacturers and traders?
00:19Good morning, Ram Ram.
00:21Madam, this GST reform, we were waiting since last six to seven years
00:27and we are thankful to the Honorable Prime Minister, State and Centre Ministers
00:32and along with GST Council team that they have come up with the GST reform in textile
00:40because after agriculture, this textile gives the major employment.
00:45Now, I'll tell you how it is being benefit once the government has given some GST reform.
00:52So I'll let you know how it will be benefit for the textile, the whole textile,
00:57in the textile, the textile government, it starts from the government.
01:04So earlier the government up to thousand rupees per government piece, it was 5%
01:10and after the thousand rupees, it was 12%.
01:14And now the limit has increased from thousand to two thousand five hundred.
01:19Now, suppose if I buy, if I'll buy a shirt or a t-shirt of two thousand five hundred rupees,
01:26earlier I was paying around three hundred rupees as a GST.
01:31Now I'll be paying only one hundred twenty five rupees of GST.
01:37So this will be a very, very good.
01:39We will be saving one hundred seventy five rupees on each product after this GST reforms.
01:46So it is very good for the common man fabric because earlier the cotton, there was no duty.
01:53Duty was all five percent, but in man-made fiber, the duty was 18 percent, 12 percent, five percent.
01:59And this with this, it will be helping the common man, poor man and common man.
02:05They can buy more.
02:07They can save more.
02:08They can spend this one hundred seventy five rupees there on their factory and other things.
02:13With this, the government units, which are the very, very small, small MSMEs are there.
02:19They will get the boost.
02:20And moreover, they will start registering their GST number.
02:25Earlier they were thinking not to register, paying cash and buying the yarn.
02:30The second thing is there now comes to the government who gets the fabric from the weaver.
02:37Weaver earlier was getting a yarn at 12 percent and their fabric was at five percent.
02:44Now the yarn is also five percent and their fabric is also five percent.
02:50So they have to put, give only, they have to deposit on the value addition also.
02:56So a lot of calculation.
02:59We were, we were small, small MSMEs.
03:02They were not able to keep more stuff to keep all the records, first to deposit, then to take the refund.
03:09So this is a very ease for weaving union also.
03:13Also now comes the third stage upward value spinning industry.
03:18Earlier the spinning industry was getting the fiber at 18 percent and the yarn was 12 percent and they were giving to the fabric at 5 percent.
03:29So now they will be taking the fiber also at 5 percent and the yarn is also 5 percent.
03:36So a lot of employment will be there and the expansions will be there.
03:41As on today the growth of textile was hardly 5 to 6 percent and now we hope this whole, this expansions will be doubled.
03:50Right, right Mr. Vij, hi this is Ankita also joining in.
03:53Mr. Vij, we figured out how much of an impact or benefit the consumers will reap from it and of course the various aspects of the textile industry as well.
04:02But give us a sense of how will the margins get benefited for your company and the textile industry in general.
04:10What is going to be the impact on the margins if you can quantify and put a number to it?
04:15So as on today the whole textile industry after agriculture is not having a much profit.
04:22On the abita if you see the whole textile industry is 5 to 6 or 7 percent not in double digit.
04:29Now when the cost, the GST inversion has come, ease of doing business has come, the margins will also increase.
04:38That because we now, India has a 140 crore of the population, young population and after roti kapda makan is there, kapda is very much necessary.
04:49Now when the demand will grow, our domestic demand will grow and the import, the major advantage will be there.
04:57Now the import of the fabric and government will stop and the demand local will increase.
05:03So local people will expend more, will get more job and same time when demand increases, then the abita margin, profit also increases.
05:13So the, the persons will, poor persons will get cheaper fabric and the manufacturers will get some of the advantage in the profit sharing also.
05:25Right. So that's about the cost part and an overall demand perspective.
05:32But Mr. Witch, could this GST rate cut also revive demand in domestic, apparel and textile markets referring, you know, specially to the segments mass market and rural segments?
05:42I'm just telling you that over 70 to 75% people are, you know, poor men's and middle men's are there.
05:52They will be much, much benefited with this lower GST on government up to 2500, then yarn, fabric and the filaments also filaments also earlier were having 12%.
06:08The, the, the, the major advantage go, will go to the poor man and the middle men because world over the, the, the growth is in the man-made fiber earlier, the, in textile man-made fiber, there was lot of inversion was there and the cost of the fabric and government was higher due to more GST.
06:29Now it has come down to 5%, so it will be benefit to the whole textile industry.
06:34Here I'm just wanting to tell you because we are getting the feedback right from government till the upstream because in cotton, yarn, fabric, there was one GST rate, but in man-made fiber, there was 18, 12, 5.
06:51So they are only, they, they are, they are, they are telling me to convey to the government that in future whenever the, they are, because the capital, some, because the PTA MEG is 18%, which is the basic raw material of man-made fiber.
07:07Right.
07:08And then fiber is 5%.
07:09Right.
07:10And then fiber is 5%.
07:11The capital cost will increase.
07:12Okay.
07:13The, we will get the refund, but when we'll put a more industry, we'll expand it.
07:16Right.
07:17Then the more capital will be there so that we, they want that the government in the next reform should also reverse that.
07:26And another thing.
07:27Point taken, Mr. Vij.
07:28We are completely timed out.
07:30Thank you so much for taking the time and joining us.
07:33It's, it's not going to just benefit the end consumers, but also has simplified.
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