Indian textile industry hails move to lower GST e-invoicing threshold


The Indian textile industry leaders have lauded the government’s decision to lower the annual turnover limit for Good and Services Tax (GST) e-invoicing for business to business transactions to ₹5 crore, which came into effect on August 1. They view this change as beneficial for enhancing transparency, promoting business growth, and encouraging traceability and legal compliance.

Some industry experts also acknowledged challenges such as the need for experienced personnel and potential internet connectivity issues in remote areas but overall regarded the move as positive. They believe that e-invoicing will foster greater confidence in the market, restrict fraudulent practices, and be a step towards global competitiveness.

R Girirajan, managing partner of Siruvani Yarns, praised the Indian government’s e-invoicing initiative but emphasised the need for experienced personnel to handle the work properly. He told Fibre2Fashion, “In one way, this is really a good move by the government. Even though there is nothing wrong with this matter, there should be exclusive, dedicated, and experienced persons to handle this work properly. We need to pay more for those experienced people. Certain remote places don’t have proper internet connectivity, and this could be a challenge here. Of course, in due course of time, people will get used to it. Otherwise, it is a good move.”

S Duraisamy, managing director of Selvas Garments (Digsel), expressed that the new rule does not pose a threat or damage to businessmen and will, in fact, restrict the operation of fraudulent practices. He said, “There is no big threat or damage to businessmen because of this. When they include all their business transactions into this, their turnover will obviously increase, which will be helpful for them to approach the government for any kind of subsidy or loans based on their business volume.”

“They can’t duplicate and manipulate the invoices once raised and filed through this. This rule will also make it easy for the movement of goods from one point to another. One more great advantage is that when we do e-invoicing, suppliers and customers are confident and happy that our company is a genuine one. People operating with bogus bills cannot have a free run in the market, which will help boost the business for all,” Duraisamy added.

Kumaresan, managing director of Varna Clothings P Ltd (Alaya Cotton), said, “For better growth of the industry, and sustainability for any entrepreneur in the market consistently, there is a need not only for strict implementation of rules but also for hassle-free operational conveniences for all. In that way, this rule is a welcome one.”

R Rajnikanth, managing director of Eurocot Textiles India Private Limited, emphasised the importance of traceability in the textile industry, even for small products like towels. He believes that e-invoicing will offer traceability, being especially vital in a complex industry like textiles.

Rajnikanth told F2F: “Today, even a small towel demands an avenue for traceability. Thus, in my opinion, concepts like e-invoicing will provide an option for traceability, which is much needed in a multi-layer industry like textiles.

“Another advantage I see with respect to mandating e-invoicing is its impact on legal compatibilities. E-invoicing brings ease of business, and tools like Zoho and Tally have frugally enhanced the working environment. By ‘legal’, I also include aspects such as child labour, the number of women in the workforce, and more. In a highly critical industry, wilful defaulters will be identifiable.”

Rajnikanth is of the opinion that if the Indian textile industry is to enter the global arena, some processes need to be in place. “I personally feel that e-invoicing is the first step for the Indian textile industry to stay ahead of the curve and compete in the global market. The textile industry is a cyclic one; at good times, we make money, and we need government policies that support us during our downtime. Policies like PLI are primarily for large companies. Growth-based PLI should be given to SME companies in terms of machinery, IT infrastructure, and others.”

The limit has been reduced from ₹500 crore to ₹5 crore in a phased manner.