Plea to reduce GST on rayon yarn to 5 percent

Federation of Tamil Nadu Power Loom Associations state president LKM Suresh submitted a petition to the Central GST Deputy Commissioner seeking reduction of GST on rayon yarn from 12 to 5 percent.
He said that next to agriculture more than 20 lakh weavers are getting employment opportunities through more than 6 lakh power looms in Tamil Nadu.
In the production of grey cloth, cotton and artificial man made rayon yarn play a major role. When GST was introduced, the tax on rayon yarn was 18%. After the power loom associations plea, it was reduced to 12%.
When the fabrics produced through that yarn a sales tax of 5% is levied during sales. The remaining 7% becomes an input tax credit balance.
It takes more than 3 to 4 months from the date of purchase of the yarn to get back that tax credit. Therefore, our maximum business investments become tax credits. In that situation, the powerloom weavers have to take more loans to purchase yarn for next fabric production, and suffer losses due to interest on loans. 
To avoid this, our  Federation of TN Power Loom Associations, sent petitions to the Prime Minister, Finance and Textile Minister to insist the GST Council to reduce the 12% tax rate on manmade rayon fibre yarn to 5% to protect the power loom weavers and thus remove the problem getting back input tax 
credit.