Impact of GST on Textile Industry
Introduction:-
- Taxes paid on purchase and installation of capital asset and equipment can be claimed as Cenvat credit. This will lead to up gradation and expansion of the Textile Industries with latest Improve technologies.
- Under GST, All Fiber will be treated in same way. No discrimination between cotton fiber and man-made fiber.
- Reduction in Manufacturing cost due to subsume the various fringe taxes like octroi, entry tax, luxury tax etc.
- Input credit allowed on capital goods
- Smoother input credit system.
- Increased compliance burden.
- Due to decrease exemption limit from Rs.1.5 crore to Rs.20 lakh the number of assesses would increase.
- GST is a technology driven law, which would pose difficulties to small players, who may find it difficult to adapt.
Registration
Firstly small Dealer and non registered dealer to apply for new registration if their turnover exceeds Rs 20 Lac in previous financial year. Dealers need to obtain separate registration for each state even if it pertains to the same dealership and covered under the same PAN. But dealer can opt for multiple registrations within the state for various dealerships.
Returns
Compliance burden will be very high in the GST System as one has to file 37 Returns in one financial year for each registration apart from ISD/TDS returns as the case may be
Accounting
Communication, flow of documents from vendor to tax consultant should be before 10th of the subsequent month. Therefore, accounting department needs to be faster.
