“EFFECTS OF CHANGES IN INDIRECT TAXATION ON WORKING CAPITAL MANAGEMENT OF TEXTILE INDUSTRIES” (WITH SPECIAL REFERENCE TO TEXTILE UNITS OF BHILWARA)

Dr. Vishal Mehta Prof. Ankur Sodani

Abstract


Abstract:- This research paper highlights the analysis of the impact of Goods and Services Tax on the working capital of textile industries of Bhilwara region. Increase in working capital requirement due to complex structure of GST as well as change in tax rate on various textile products. Research work investigates the influence of the accumulation of GST and changein tax structure on the short term capital requirement of the industry. Working capital is considered as key factor in the health of a business. Implementation of GST makes this even more imperative. This is because the tax bucket of textile business was changed. Not just this, the rules and timelines for availing a line of credit was also be revamped under the new GST regime. As such, the transformation to the GST system would undoubtedly affect companies having weak credit profiles, because of a short-term liquidity mismatch due to delays in the availability of input tax credit. This means that cash flow of the industry was impacted and the need to look forward for new sources of working capital finance.

Keywords:- GST, Working Capital, Textile Industries, Input Tax Credit.


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