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The table above shows the VAT rates of cotton for different states such as for AP its 4.5%, MH,BH,UP and WB its 5%.POST GST:Cotton is classified under chapter 52 of the HSN code. Accordingly, goods made out of cotton likeGandhi topi and khadi yarn are exempt from GST. All other cotton and cotton goods as underattract 5% GST.• Cotton• Cotton waste• Cotton sewing thread• Cotton yarn, other than khadi yarn• Cotton fabrics With no refund of ITC accumulation.This low rate of interest will not only encourage farmers to produce more cotton but will alsoensure that India regains its competitiveness in the worldPost GST the production of cotton has gone up. Its exports are even likely to increase as they havebecome less competitive.1. No discrimination of goods under GST , all fibre will be treated in the same way2. Subsuming different taxes entry tax, octroi, luxury tax will reduce the overallmanufacturing cost.3. Taxes paid for purchasing new technologies were very expensive as ITC wasn’t allowed.After implementation of GST, ITC was available on capital goods.4. Before the implementation of GST, ITC wasn’t allowed under composite scheme but afterGST maintains a balance with organised sector.5. Administrative cost for textile industry would increase as most of the activities are out oftax net.6. Introduction of GST removed the fiscal barriers such as carrying cost, logistics cost whichhelped in reducing interstate barriers.7. GST includes road tax and environment tax, whereas Service tax or VAT is not paid onroad tax element.8. Dealers used to receive post supply discounts based on goods lifted, targets etc. but underGST no deductions will be provided.GST brings with it both negative and positive impacts.II. SILK INDUSTRYIndia is second largest silk manufacturer contributing to 18% of raw silk production. Therequirement of raw silk is much higher than the current production.

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