Policy Formulation Support

Strategy > Textile and Apparel > Policy Formulation Support

Implications of Goods and Services Tax (GST) on Indian Textile Industry

Project Brief

The Goods and Services Tax is to be introduced in the Indian tax system and it is expected to replace several state and central level taxes. Ministry of Textiles wanted to conduct a study for understanding the likely impact of GST on different stakeholders of the Textiles sector.

Project Objectives:

The key objective of this assignment was to throw light on the problems faced by the various sectors of the textiles industry in the renewed taxation regime and expected implication of GST. To conclude this, the following aspects were covered:

Mapping the entire textiles value chain with current exemptions, rates of custom duties, excise duties, VAT and other indirect taxes including service tax on goods and services in all states (provinces) with incidence of centre and state taxes on it
Quantifying the applicable taxes and listing down the incentives offered
Understanding the basic design of the GST and its application to the textiles sector by developing potential scenarios
Analysing the need and justification for exempting any sub-sector or item in textiles industry under GST including area based exemptions like special economic zones and export-oriented units
Enumerating the problems faced by different segments and analysing the impact of GST on aggregate tax burden, vulnerable segments, price, demand, production, investment, etc.

Deliverables:

Provided recommendations on the following:

Revenue neutral rates to be implemented
Segments which should be exempted from GST
Minimum turnover threshold required for mandatory registration
Measures required for the transition to the proposed GST

Recommendations for Union Government of India for Upliftment and Revival of Jute Sector

Background

The client is an apex organization representing the Indian jute industry. To revitalise the jute industry, the client wanted assistance in preparing recommendations for Standing Advisory Committee.

Project Objectives:

The key objective of this assignment was to provide policy recommendations for revival of jute sector which was done by answering the following key questions:

What is the current status of Indian jute industry?
What are the key products offered?
Who are the current buyers and their buying potential?
How much is the volume of exports?
Which are the markets for jute products both domestic and international?
What is the socio-economic importance of Jute sector?
What are the USPs of jute product for usage including environmental concerns, reusability?
What are the emerging product and market trends?

Deliverables:

Wazir prepared the recommendations for Union Government of India for upliftment and revival of Jute Sector.

Support Expert Committee in Drafting India’s National Textile Policy

Background

The client is a government body playing a major role in textile industry. The Client felt the need to develop the new policy to develop a vision and enhance India’s share in the global trade. For this an Expert Committee was set-up to recommend a Vision, Long term Strategy and Action plan. A draft was to be prepared for which they engaged us as their strategy consultant.

Project Objectives:

The key objective of this assignment was to recommend a Vision, Long Term Strategy and Action Plan to be incorporated in the new National Textile Policy. The policy was drafted answering the following key questions:

Where is the global textile industry and India’s positioning?
What is current status of the existing Indian textile industry and its stakeholders?
What is the strengths of this industry and underlying growth opportunities?
Which are the major sectors that needs to be focused?
What are the takeaways from the policies of competing textile manufacturing nations?
What are the growth impediments this industry is facing and how these can be addressed?

Deliverables:

Assisted in establishing a vision for Indian textile industry for 2025, keeping in view the current status of Indian textile industry.
Proposing a strategy and development of an action plan to achieve that vision including:
1. Key issues and growth impediments of Indian textile industry
2. Recommended actions to be taken on various issues, schemes and acts
3. Roles of various actors (government, industrial bodies, associations, stakeholders etc.) to bring the proposed changes
4. Timeframe required for implementation of each of the suggested actions