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Textile inverted duty structure (raw material 18%, finished goods 5-12%) creates large refundable ITC. Exporters under LUT route avoid IGST on exports. Tirupur Star Rated Exporter scheme offers tax holiday and subsidies.
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Why this matters for textile businesses
Tamil Nadu produces ~40% of India's textile output (Tirupur knitwear, Erode handlooms, Karur home textiles, Coimbatore yarn). Compliance for textile businesses spans pollution control NOC for dyeing units, factory licence under the Factories Act, IEC for exporters, GST with the inverted duty structure quirk, and labour compliance (PF, ESI, Factories Act). FilingLab handles the full vertical — from a 5-loom handloom cooperative to a 200-employee export factory.
Audience-specific note
Textile inverted duty structure (raw material 18%, finished goods 5-12%) creates large refundable ITC. Exporters under LUT route avoid IGST on exports. Tirupur Star Rated Exporter scheme offers tax holiday and subsidies.
Aadhaar-based ANF-2A filing on DGFT portal
IEC certificate download
Annual KYC update support
Duty drawback / EPCG advisory
DGFT 10-digit code in 5-7 days. Lifetime validity with annual KYC update.
You
FilingLab
Govt
01
You
Document collection
PAN, Aadhaar, bank account proof, business address proof.
1 day
02
FilingLab
ANF-2A filing
Application submitted on dgft.gov.in.
Same day
03
Govt
DGFT review
DGFT verifies and issues IEC.
5–7 days
04
FilingLab
IEC certificate + advisory
Certificate downloaded; we walk you through duty drawback / EPCG benefits.
1 day
01
You
· 1 day
Document collection
PAN, Aadhaar, bank account proof, business address proof.
02
FilingLab
· Same day
ANF-2A filing
Application submitted on dgft.gov.in.
03
Govt
· 5–7 days
DGFT review
DGFT verifies and issues IEC.
04
FilingLab
· 1 day
IEC certificate + advisory
Certificate downloaded; we walk you through duty drawback / EPCG benefits.
When input GST (18% on yarn, dyes, services) exceeds output GST (5% on fabric, 12% on garments), you accumulate ITC. Refund is claimable monthly via Form RFD-01. Typical refund: 8-15% of turnover annually.
Yes — mandatory 10-digit code from DGFT before exporting. Also recommended: APEDA registration for some categories, RoDTEP scheme registration for export incentives.
Mandatory. Most dyeing units are Red category — Consent to Establish (CTE) before construction + Consent to Operate (CTO) before commissioning. Effluent treatment plant compliance is non-negotiable.
Also for textile businesses