Power loom industry hopeful of getting ITC refunds

Surat: The power loom weavers in the country’s largest man-made fabric (MMF) sector are hopeful that the union finance ministry will accept the long-pending demand for the refund of the accumulated input tax credit (ITC).
Sources in the power loom industry said that the union ministry of textiles, had appointed Ernst & Young as the consultant to submit the report on the ITC in the textile sector.After studying the facts, the consultant submitted that the demands put forth by the weaving sector for the ITC refund is genuine.
Talking to TOI, chairman of Federation of Indian Art Silk Weaving Industry (FIASWI), Bharat Gandhi said, “A delegation of FIASWI and textile industry leaders had met textile minister Smriti Irani in New Delhi last Saturday. As per the report of Ernst & Young, the textile ministry has submitted the request for the refund of ITC to the power loom weaving industry. We are hopeful that our demand will be accepted.”
According to Gandhi, there are about 6 lakh power loom machines in Surat. Each machine has an ITC accumulation of Rs 7,000 per annum. This comes to around Rs 420 crore per annum.
“There are more than 24 looms in a single unit and that it could go up to 100 and 150 machines as well. If we calculate the annual ITC amount then it is difficult for the powe rloom weaver to manage from the earnings. Without ITC refund, the industry will collapse” said Gandhi.
President of Pandesara Weavers Association, Ashish Gujarati said, “About 1 lakh power loom machines have been sold in scrap in the last few months and the pace of modernization in the industry has been stalled. This is all due to the non-refund of ITC to the weaving sector”