After Implementation Impact of GST on the Financial Health of Textile Companies: South West Rajasthan

On 1st July 2017, GST was implemented across India, including Jammu & Kashmir. The textile sector being 2nd most employed sector for our economy approx. 700 million Indians. The credit cycle across the textile sector was doubled to 240 days approx due to this. While it has majorly helped the organized industry as they were able to cope with the updation and Compliance part of GST filing and Input Tax Credit on a timely basis. India is the 2nd largest producer of textiles and garments after China. It is the world’s 3rd largest cotton producer after USA & China and the 2nd largest cotton consumer after China. Indian textile industry is currently estimated to be the U.S. $200 billion and expected to reach the U.S. $250 billion by 2025. The sector contributed 12% to the export earnings of India in 2019-20. The textiles sector has witnessed a massive inflow in investment during the last five years. The industry attracted Foreign Direct Investment (FDI) worth US$ 3.97 billion from April 2014 to March 2019.South West Region/Mewar Region of Rajasthan is well known for its Suiting Industry around India, producing approximately 800 million meters of textile suitings monthly and exporting around Rs. Six hundred million worth of suiting and denim worldwide on an annual basis (19-20). In this paper, we have tried to analyze the pre and post-impact of the GST implementation on Operating Revenues, total taxes paid and Input Tax Credit (ITC), Trade Receivables, Trade Payables, and Profit After Tax by selected Listed Companies of the Textile Sector in the South West Region of Rajasthan. We have done data testing via Mann- Whitney U test for the same and concluded with its results. Also, for June 2021, GST collected across India was Rs. 92,849 crores, which decreased from Rs.1.41 Lakhs crores in April 2021.