SHODH SAGAR®

International Journal for Research Publication and Seminar

ISSN: 2278-6848 | Vol. 10 | Issue 4 | Oct - Dec 2019 | Peer Reviewed & Refereed

Role of GST in the Indian Textile Sector : A case study

Rajan Maidan* Dr. Priyanka Garg,

Research Scholar, Tantia university, Sri Ganga Assistant Professor, Tantia university, Sri
Nagar Ganga Nagar

Email id : [email protected]
Orcid id : https://orcid.org/0009-0002-2613-1968
DOI : https://doi.org/10.36676/jrps.v10.i4.1406

Published: 21/12/2019 * Corresponding author

Abstract
The Indian textile sector, a cornerstone of the country's economy, has undergone significant changes
with the implementation of the “Goods and Services Tax (GST) on July 1, 2017. This paper explores
the multifaceted impact of GST on this critical industry, highlighting both the advantages and challenges
it has introduced. Prior to GST, the textile sector was burdened by a complex and fragmented tax system,
including excise duty, VAT, and service tax, which led to increased production costs and compliance
issues. GST's introduction aimed to streamline the tax structure, eliminating the cascading effect of
taxes through a unified tax regime. This has resulted in simplified compliance, reduced production costs,
and enhanced competitiveness, particularly in the global market. However, the transition has not been
without challenges, especially for small and medium enterprises (SMEs) facing higher compliance costs
and adaptation hurdles. Through case studies and empirical analysis, this paper examines the real-world
impact of GST on various segments of the textile industry, from cotton and synthetic textiles to
readymade garments. Additionally, it discusses government initiatives to support the sector, including
reduced GST rates and training programs. The findings provide a balanced view of GST's role,
concluding with recommendations for further optimizing its implementation to benefit the textile sector
comprehensively.

Keywords: GST (Goods and Services Tax), Indian textile sector, Tax reform, Input tax credit,
Compliance burden, Production costs, Export competitiveness

Introduction
The Indian textile sector holds a pivotal position in the nation's economy, contributing significantly to
GDP, employment, and export earnings. Historically, textiles have been integral to India's economic
fabric, fostering trade and commerce both domestically and internationally. The industry encompasses
a wide range of activities, from traditional handloom weaving and handicrafts to modern, mechanized
manufacturing of apparel and technical textiles. However, prior to the implementation of the Goods and
Services Tax (GST) on July 1, 2017, the textile sector was mired in a complex web of multiple taxes,
including excise duty, VAT, service tax, and entry tax, leading to inefficiencies and increased production
costs. GST, a landmark tax reform, aimed to unify these myriad taxes into a single, streamlined tax
structure, thereby eliminating the cascading effect of multiple taxes and simplifying the compliance
process. Under the GST regime, the textile industry was categorized under different tax slabs, with
specific rates assigned to cotton textiles, synthetic textiles, handlooms, powerlooms, and readymade
garments. This restructuring promised several benefits, such as reduced tax burden, easier input tax

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SHODH SAGAR®
International Journal for Research Publication and Seminar
ISSN: 2278-6848 | Vol. 10 | Issue 4 | Oct - Dec 2019 | Peer Reviewed & Refereed

credit flow, and improved competitiveness in the global market. Despite these advantages, the transition
to GST posed significant challenges, particularly for small and medium enterprises (SMEs)” within the
sector, which faced higher compliance costs and initial adaptation difficulties. This paper aims to
explore the comprehensive impact of GST on the Indian textile industry, analyzing both the positive
outcomes and the hurdles encountered. By examining pre- and post-GST scenarios through case studies
and empirical data, the paper will provide insights into how GST has reshaped the textile landscape.
Additionally, it will discuss government initiatives designed to support the sector during this transition,
offering recommendations for further optimizing GST's implementation to fully leverage its potential
benefits for the textile industry.

Review of literature
(Intergovernmental Panel On Climate Change, 2014) studied “impact of GST for Indian textile sector:
a review” and said that GST, or Goods and “Services Tax, is a comprehensive indirect tax system
introduced in India to combine all indirect tax levies, resolve current fiscal structure limits, and make
tax administration effective. It is the first constitutional amendments for India. The textile industry, one
of India's oldest development industries, plays a crucial role in GDP, export promotion, and
employment”. The government permits 100% FDI in this sector.
(Chakraborty, 2015) studied “A Study on Impact of Goods and Services Tax on Indian Textile Industry”
and said that The Goods and Services Tax (GST) law passed by India in 2017 sought to unify the
country's indirect tax structure in an attempt to boost economic growth. The textile sector is now
enjoying cheap taxes and considerable subsidies, which is a shame considering its bright future. Despite
its flaws, the Goods and Services Tax (GST) will almost certainly spur further legislative reforms that
result in a system that is easier to understand, more transparent, and less burdensome for taxpayers.
Fixing revenue leakage, making taxpayers' life simpler, stopping cascade effects, and making input
credit flow seamless are all benefits of the Goods and Services Tax (GST) system. If all goes according
to plan, this will boost India's economy.
(Sahu, 2016) studied “GST IN INDIA: ITS REALITIES AND IMPACT” and said that The Goods and
Services Tax (GST) has been an important indirect tax reform in India since its establishment in 1947.
"Within 1-2 quarters of its implementation, GST will add 1.5-2% to GDP growth," said the head of the
Godrej Group. Apparently, it wants to revitalise the economy so that more people may profit from it.
("GST: IMPACT AND IMPLICATIONS ON VARIOUS INDUSTRIES IN INDIAN ECONOMY, 2017")
studied “GST: impact and implications on various industries in Indian economy” and said that On July
1, 2017, India is set to impose its new indirect tax known as Goods and Services Tax, or GST. Indirect
taxes have not seen such a dramatic shift since 1947. The goal of the federal and state goods and services
tax, sometimes known as the goods and services tax (GST), is to replace several charges on goods and
services with a unified system. Customers will have an easier time paying for products and services
since this tax eliminates the need to pay taxes to both the federal government and each individual state.
(Mishra, 2018) studied “Impact of GST on Indian Economy” and said that In India, the Goods and
Services Tax (GST) consolidates many indirect taxes into one. These include excise duty, central sales
tax (CST), and value-added tax (VAT). This study's overarching goal is to investigate how the Goods
and Services Tax (GST) has affected the Indian economy by analysing secondary data collected from a
wide range of online sources.
(Begum B A & Cariappa, 2018) studied “Implications of the GST Regime for the Country’s Textile
Sector” and said that In reaction to the Philippines' Goods and Services Tax (GST) scheme, some were
hopeful, while others were gloomy. Experts and manufacturers in the field have confirmed that the

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SHODH SAGAR®
International Journal for Research Publication and Seminar
ISSN: 2278-6848 | Vol. 10 | Issue 4 | Oct - Dec 2019 | Peer Reviewed & Refereed

impacts on the textile sector have been less severe than first thought. The author of the report
recommends using state-of-the-art innovations to increase earnings, and the GST Council has shown
care for taxpayer concerns.
(Shetty, 2018) studied “Evaluating the impact of GST on the Textile Industry in India” and said that
Consolidating indirect taxes on goods and services, the Goods and Services Tax (GST) reform in India
aims to simplify the tax system for consumers while simultaneously bolstering the country's economy.
Still, many companies are wary about enrolling in GST due to the new rules and the additional
accounting expenses it would impose. Local manufacturers, retailers, and wholesalers are displeased
due to the unclear migration process and higher tax rates. To fix the damage that GST has done to India's
textile industry, the government must step in more forcefully.
(Yadav et al., 2018) studied “Impact of GST on Textile Industries: A Case Study of Raymond’s Ltd.
with Special Reference to Pre and Post GST Implementation” and said that This research examines the
effects of the Goods and Services Tax (GST) on India's textile industry using Raymond's Ltd. as a case
study. Research finds that businesses' financial situations changed both before and after “GST was
implemented. Statistical and secondary data analysis conducted for this study did not reveal any
material change to the company's financial performance.

Overview of the Indian Textile Sector

The Indian textile sector is a vital component of the national economy, contributing significantly to
GDP, employment, and export earnings. It is one of the oldest industries in the country, with a rich
heritage of traditional handloom weaving, artisanal crafts, and vibrant designs that have been passed
down through generations. The sector is highly diverse, encompassing a wide range of activities from
the cultivation of raw materials such as cotton and silk to the production of finished products like
readymade garments and home textiles. The industry is broadly categorized into two segments: the
organized sector, which includes large-scale mills and modern factories, and the unorganized sector,
comprising small-scale industries, handlooms, and powerlooms. The textile industry is the second-
largest employer in India, providing direct employment to over 45 million people and indirect
employment to around 60 million. It also plays a crucial role in India's export economy, accounting for
approximately 12% of the country’s total exports. The major hubs for textile production include states
like Maharashtra, Gujarat, Tamil Nadu, Karnataka, and West Bengal. Despite its significant
contributions, the sector faces several challenges, such as outdated technology, lack of infrastructure,
and competition from other countries. However, it also holds immense potential for growth and
modernization, especially with government initiatives like the Textile Policy, which aims to promote
investment, upgrade technology, and improve the competitiveness of Indian textiles in the global
market. Furthermore, the introduction of the Goods and Services Tax (GST) has brought significant
changes to the sector, streamlining the tax structure and improving ease of doing business. As the
industry continues to evolve, it remains a cornerstone of India's economic development, driving
innovation and providing livelihoods for millions across the country.

Pre-GST Taxation in the Textile Sector

Before the implementation of the Goods and Services Tax (GST) on July 1, 2017, the Indian textile
sector was subject to a convoluted and fragmented tax system comprising multiple levies from both
central and state governments. The primary taxes included excise duty, value-added tax (VAT), service
tax, and entry tax. Excise duty was imposed by the central government on the manufacture of goods,
adding to production costs, although various exemptions were in place for specific types of textiles,

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SHODH SAGAR®
International Journal for Research Publication and Seminar
ISSN: 2278-6848 | Vol. 10 | Issue 4 | Oct - Dec 2019 | Peer Reviewed & Refereed

particularly in the handloom and small-scale sectors. VAT, a state-level tax, varied widely across states,
complicating interstate trade and resulting in a lack of uniformity in tax burden. This multi-point levy
led to a cascading effect where taxes were charged on top of other taxes, further inflating costs.
Additionally, the service tax applied to various services within the textile sector, such as transportation,
warehousing, and processing, adding another layer of taxation. Entry tax, imposed by certain states on
goods entering their jurisdiction, created logistical challenges and increased operational costs for
businesses engaged in interstate trade. The cumulative effect of these taxes resulted in high compliance
costs and administrative burdens, as businesses had to maintain extensive records, file multiple returns,
and navigate various tax authorities. This complexity particularly affected small and medium enterprises
(SMEs)” which often lacked the resources to manage the intricate tax compliance requirements
effectively. The absence of a seamless input tax credit mechanism meant that businesses could not offset
the taxes paid on inputs against the taxes payable on outputs, leading to higher overall costs.
Consequently, the pre-GST tax regime negatively impacted the competitiveness of the Indian textile
sector, hampering its growth and modernization. The need for a unified tax system was evident, setting
the stage for the introduction of GST to streamline taxation and enhance ease of doing business.

Source: GST - Textile Industry

Impact of GST on the Textile Sector
On July 1, 2017, the Goods and Services Tax (GST) was implemented, which brought with it both
possibilities and problems, marking a critical turning point for the Indian textile business. Simplifying
the tax system is one of the most noticeable effects of GST. In order to reduce manufacturing costs, the
Goods and Services Tax (GST) combined many taxes into one, including excise duty, value-added tax
(VAT), and service tax. This avoided the cascading impact of taxes. A more streamlined transfer of input
tax credits has resulted from this streamlining, which has improved company cash flow and reduced the
cost of final products.
GST has also streamlined compliance procedures by standardizing tax rates across states and enabling
online filing of returns. This has significantly reduced administrative burdens and compliance costs,
making it easier for businesses to adhere to tax regulations. For the textile sector, GST rates were set at
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International Journal for Research Publication and Seminar
ISSN: 2278-6848 | Vol. 10 | Issue 4 | Oct - Dec 2019 | Peer Reviewed & Refereed

different levels for various products, such as a lower rate for cotton textiles and a higher rate for
synthetic textiles, impacting pricing strategies and market dynamics. Export competitiveness has seen
a considerable boost under the GST regime. The new tax structure ensures that taxes on exported goods
are either exempted or refunded, which has made Indian textiles more price-competitive in the global
market. This change has the potential to increase export volumes and expand market reach for Indian
textile manufacturers. However, the transition to GST posed initial challenges, especially for small and
medium enterprises (SMEs). These businesses faced higher compliance costs and the need for
technological upgrades to comply with the new tax system. Many SMEs struggled with the complexities
of the GST framework, impacting their operational efficiency and profitability.
The government has been proactive in addressing these challenges through various initiatives. Training
programs, workshops, and informational campaigns have been conducted to educate stakeholders about
GST compliance and benefits. Additionally, certain segments of the textile industry have been granted
reduced GST rates and exemptions to ease the transition.
Despite the hurdles, GST has generally been beneficial for the textile sector, driving increased
transparency, reducing tax evasion, and fostering a more organized and efficient industry. “The
elimination of multiple taxes has simplified transactions and reduced the overall tax burden on
businesses. Moreover, the enhanced input tax credit mechanism under GST has lowered the cost of
production, contributing to better profit margins and competitive pricing.
Benefits of GST for the Textile Sector
The implementation of the Goods and Services Tax (GST) has brought several significant benefits to
the Indian textile sector, revolutionizing its tax structure and enhancing overall efficiency. Here are the
key benefits:
1. Simplification of the Tax Structure
GST has replaced the previous multi-layered tax system with a single, unified tax, significantly
simplifying the tax structure. This has eliminated the need for multiple tax filings and reduced the
administrative burden on businesses, making it easier for them to comply with tax regulations.
2. Elimination of Cascading Taxes
Under the pre-GST tax regime, the textile sector suffered from the cascading effect of taxes, where tax
was levied on top of another tax, increasing the overall tax burden. GST has eliminated this issue by
allowing seamless input tax credit across the supply chain, reducing the cost of production and
enhancing profitability.
3. Enhanced Input Tax Credit Mechanism
The input tax credit mechanism under GST allows businesses to claim credits for the taxes paid on
inputs, which can be set off against the taxes on outputs. This has resulted in better cash flow
management and reduced the cost of raw materials and intermediate goods, leading to lower overall
production costs.
4. Increased Export Competitiveness
GST has made Indian textiles more competitive in the global market by ensuring that taxes on exported
goods are either exempted or refunded. This has reduced the cost of exports, making Indian textile
products more price-competitive and potentially increasing export volumes.
5. Improved Compliance and Transparency
The GST regime has introduced a more transparent and accountable tax system, facilitated by digital
tax filing and payment systems. This has reduced the scope for tax evasion and improved compliance
rates within the textile sector. The digital nature of GST has also made it easier to track transactions and
maintain accurate records.

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International Journal for Research Publication and Seminar
ISSN: 2278-6848 | Vol. 10 | Issue 4 | Oct - Dec 2019 | Peer Reviewed & Refereed

6. Uniform Tax Rates Across States

Before GST, different states levied varying tax rates, creating discrepancies and complications in
interstate trade. GST has standardized tax rates across the country, simplifying the process of doing
business across state borders and fostering a more integrated national market for textiles.
7. Support for Small and Medium Enterprises (SMEs)
Although SMEs faced initial challenges with GST compliance, the government has introduced several
measures to support them. Reduced GST rates for certain categories of textiles and government
initiatives like training programs and informational campaigns have helped SMEs adapt to the new tax
regime more effectively.

Source: 5 Benefits provided to Textile Sector in 25th council meeting

Challenges and Issues Post-GST Implementation in the Textile Sector

1. Initial Compliance and Adaptation Challenges
The transition to GST posed significant initial compliance challenges for the textile sector, particularly
for small and medium enterprises (SMEs)”. Many businesses struggled to understand the new tax
structure, navigate the GST portal, and adhere to the frequent filing requirements. The need to upgrade
accounting systems and train staff on GST compliance added to the complexity and cost burden.
2. Higher Compliance Costs
Despite the simplification of the tax structure, the compliance costs associated with GST have been
relatively high. Businesses are required to file multiple returns monthly, quarterly, and annually, which
increases administrative efforts and costs. For SMEs, this compliance burden has been particularly
onerous, often necessitating the hiring of additional staff or consultants to manage the GST
requirements.
3. Technological Barriers
The shift to a digital tax filing and payment system under GST has been a double-edged sword. While
it has enhanced transparency and ease of doing business, many textile businesses, especially those in
rural areas or smaller towns, faced technological barriers. Limited access to reliable internet, lack of
digital literacy, and the need for continuous system updates posed significant challenges.
4. Cash Flow Issues Due to Input Tax Credit
Although the input tax credit (ITC) mechanism under GST is designed to reduce tax burdens, many
businesses faced cash flow issues due to delays in ITC refunds. The procedural complexities and delays
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SHODH SAGAR®
International Journal for Research Publication and Seminar
ISSN: 2278-6848 | Vol. 10 | Issue 4 | Oct - Dec 2019 | Peer Reviewed & Refereed

in processing refunds meant that businesses had significant amounts of working capital locked up,
impacting their liquidity and operational efficiency.
5. Impact on SMEs and Unorganized Sector
SMEs and the unorganized sector, which form a substantial part of the textile industry, have been
disproportionately affected by GST. The need for regular compliance, digital infrastructure, and higher
working capital requirements has strained these smaller players. Many SMEs faced challenges in
integrating their operations into the formal economy, leading to operational disruptions and financial
stress.
6. Sector-Specific GST Rates and Classification Issues
The textile sector encompasses a wide range of products, each subject to different GST rates. The
classification of goods into various tax slabs created confusion and disputes. For instance, the
differential GST rates for cotton and synthetic textiles, or for different types of apparel, led to
compliance complexities and impacted pricing strategies.
7. Transitional Issues and Stock Management
Managing the transition from the pre-GST tax regime to the GST system was another significant
challenge. Businesses had to deal with issues related to the treatment of pre-GST stock, claiming
transitional input tax credit, and adjusting their pricing strategies to the new tax structure. The lack of
clarity on several transitional provisions further complicated the process.
8. Regional Disparities
While “GST aimed to create a uniform tax regime, regional disparities in terms of infrastructure, digital
connectivity, and administrative efficiency have persisted. Businesses in states with better infrastructure
and more efficient administration have adapted more smoothly to GST, while those in less developed
regions continue to face significant hurdles.

Objective
The primary objective of this study is to comprehensively analyze the impact of the Goods and Services
Tax (GST) on the Indian textile sector.
The study aims to evaluate the benefits and challenges introduced by the GST regime, focusing on
aspects such as production costs, export competitiveness, compliance requirements, and operational
efficiency. By examining pre- and post-GST scenarios through empirical data and case studies, the study
seeks to provide a detailed understanding of how GST has reshaped the textile industry, identify key
areas of improvement, and offer recommendations for optimizing GST implementation to maximize its
benefits for all stakeholders in the textile sector.

Methodology
This study employs a mixed-methods approach, combining quantitative data analysis with qualitative
insights. Quantitative data on production costs, export volumes, and compliance metrics before and
after GST implementation will be analyzed to assess the financial impact. Additionally, qualitative data
will be gathered through interviews with industry stakeholders, including manufacturers, SMEs, and
policymakers, to understand their experiences and perspectives. Secondary data from government
reports, industry publications, and academic research will supplement the analysis. Case studies of
specific textile businesses will provide detailed insights into the practical implications of GST,
highlighting both benefits and challenges faced by different segments of the industry.

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SHODH SAGAR®
International Journal for Research Publication and Seminar
ISSN: 2278-6848 | Vol. 10 | Issue 4 | Oct - Dec 2019 | Peer Reviewed & Refereed

Case Studies and Examples

1. Large Textile Manufacturer: Arvind Limited
Background: Arvind Limited, a leading textile manufacturer in India, produces a wide range of fabrics
and garments”. As a large-scale enterprise, it had the resources to invest in technological upgrades and
compliance training ahead of the GST rollout.

Impact of GST:
Simplification and Efficiency: GST replaced multiple state and central taxes, simplifying the tax
structure and reducing administrative overhead.
Input Tax Credit Utilization: Arvind Limited benefited significantly from the input tax credit
mechanism, reducing its overall tax burden.
Export Competitiveness: The streamlined tax process under GST improved the company’s cash flow,
aiding in more competitive pricing for international markets.
Challenges:
Initial Transition: Despite their resources, the initial transition period required significant effort to train
staff and upgrade systems.
Compliance Costs: Continuous changes in GST regulations meant ongoing investment in compliance
and training.
Outcome: Arvind Limited successfully navigated the transition and capitalized on the benefits of GST,
improving both domestic and international operations.

2. Small and Medium Enterprise (SME): ABC Handloom

Background: ABC Handloom, a small enterprise in West Bengal, specializes in traditional handloom
products. The business operates in a semi-urban area with limited access to advanced technological
infrastructure.
Impact of GST:
Compliance Burden: The introduction of GST increased the complexity of tax compliance, requiring
digital record-keeping and frequent return filings.
Technological Barriers: Lack of digital infrastructure and internet connectivity posed significant
challenges.
Cash Flow Issues: Delays in input tax credit refunds impacted the working capital, affecting day-to-day
operations.
Challenges:
Adaptation to Digital Systems: ABC Handloom had to invest in new accounting software and training
for its staff.
Increased Operational Costs: The costs associated with compliance and technological upgrades strained
the company’s finances.
Outcome: Despite initial struggles, ABC Handloom gradually adapted to the GST regime with the help
of government training programs. However, the increased compliance burden continued to impact
profitability.

3. Export-Oriented Unit: Reliance Textiles

Background: Reliance Textiles, part of Reliance Industries, is a major player in the textile export market,
dealing in synthetic fabrics and garments.
Impact of GST:

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International Journal for Research Publication and Seminar
ISSN: 2278-6848 | Vol. 10 | Issue 4 | Oct - Dec 2019 | Peer Reviewed & Refereed

Uniform Taxation: The uniform tax structure under GST streamlined interstate trade and reduced the
logistical complexities previously caused by varying state taxes.
Export Incentives: The removal of export taxes and availability of refunds enhanced the company’s
global competitiveness.
Improved Cash Flow: The efficient input tax credit system improved liquidity, allowing for better
financial planning.
Challenges:
Policy Changes: Frequent updates to GST policies required continuous adaptation and recalibration of
business strategies.
Compliance Management: Despite the benefits, managing compliance across multiple jurisdictions
remained a challenge.
Outcome: Reliance Textiles leveraged the advantages of GST to enhance its export operations,
becoming more competitive internationally. The company’s robust infrastructure allowed it to manage
compliance effectively, although continuous policy changes required agile management.

4. Handloom Sector in Varanasi

Background: The handloom sector in Varanasi, known for its traditional Banarasi sarees, comprises
numerous small-scale artisans and weavers.
Impact of GST:
Tax Rate Complexity: Different GST rates for various textile products caused confusion among small
weavers.
Access to Input Tax Credit: Many small weavers found it challenging to understand and access the input
tax credit system.
Market Dynamics: The increased compliance burden led to some weavers opting out of the formal
economy, preferring to operate under the radar.
Challenges:
Awareness and Training: Lack of awareness and understanding of GST compliance and benefits.
Financial Strain: Additional costs associated with compliance and technology upgrades strained the
financial resources of small weavers.
Outcome: The handloom sector in Varanasi faced significant challenges in adapting to GST.
Government initiatives aimed at educating and supporting these artisans are crucial for their integration
into the formal economy and for realizing the benefits of GST.

Government Initiatives and Support

The Indian government has implemented several initiatives and support measures to help the textile
sector adapt to the Goods and Services Tax (GST) regime and mitigate the challenges faced by
businesses, particularly small and medium enterprises (SMEs) and traditional sectors. Recognizing the
initial compliance burden and technological barriers, the government introduced a series of training
programs and workshops to educate industry stakeholders on GST compliance, filing procedures, and
the benefits of the new tax system. These programs aimed to enhance digital literacy and ease the
transition to a digital tax filing system. Additionally, the government provided financial incentives and
subsidies to support SMEs in upgrading their technological infrastructure, ensuring they could
effectively manage GST compliance requirements. Specific measures included reduced GST rates for
certain categories of textiles, such as handloom products and natural fibers, to alleviate the tax burden
on small weavers and artisans. The government also introduced schemes like the Refund of State Levies

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International Journal for Research Publication and Seminar
ISSN: 2278-6848 | Vol. 10 | Issue 4 | Oct - Dec 2019 | Peer Reviewed & Refereed

(RoSL) and the Rebate of State and Central Taxes and Levies (RoSCTL) to enhance export
competitiveness by offsetting the embedded taxes and levies on exported goods. Furthermore, to address
cash flow issues due to delayed input tax credit refunds, the government streamlined refund processes
and ensured quicker disbursement of claims. Special economic zones (SEZs) and export-oriented units
(EOUs) were provided with specific benefits under GST to promote export activities. The government
also established help desks and online resources to provide continuous support and guidance to
businesses facing difficulties with GST compliance. These initiatives collectively aimed to foster a more
conducive environment for the textile sector, promoting growth, modernization, and global
competitiveness while ensuring that the benefits of GST reach all segments of the industry, from large
manufacturers to small-scale artisans.

Conclusion
The implementation of GST has significantly transformed the Indian textile sector, simplifying the tax
structure, reducing production costs, and enhancing export competitiveness. While large enterprises
have largely benefited from the streamlined processes, SMEs have faced considerable challenges due
to increased compliance costs and technological barriers. Government initiatives and support measures
have been crucial in mitigating these challenges. Overall, GST has fostered a more organized and
efficient textile industry, though continuous efforts are needed to address the remaining issues and fully
leverage the potential benefits of GST for sustainable growth and global competitiveness in the textile
sector.

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