Textile Traders Three Day Strike Against GST Ends On 29 June

The strike that commenced on 27 June, witnessed many textile traders from different parts of the country coming together against goods and services tax (GST)

The three day strike which textile traders sworn on took nasty turns with each passing day with several traders joining the bandwagon to voice their concerns over GST. 

Ammanabolu Prakash, President of The Andhra Pradesh Federation of Textile Associations said, “There was no single reason for carrying out these strikes, the government had promised us they will bring down and not enhance taxes, which they did.”

Agitated Prakash added saying, “For 65 years there was no tax levied so how can this government implement it all of a sudden. They did not give us sufficient time to prepare, to bear the tax burden.”

He said that there are 29 different trades in our country but textile industry operates in a layered manner which is distinct the way other industry functions. He spoke on the various issues that the industry may face including huge labor-loss and its negative impact on salaries once GST gets implemented.

Ganotra Enterprise, another Trader, Distributor and Supplier company of Ahmedabad, Gujarat said that they are not scared to pay taxes but are fearful of the problems which would follow after the enactment of GST.

“Did they discuss with us even once before taking the decision to levy taxes on textiles? A textile trader is already paying income tax,” Ganotra Enterprise.

Various distinct Textile Traders Associations such as Federation of Surat Textile Traders Association, Secunderabad Cloth Merchants Association and The Telangana State Federation of Textile Association have joined hands against the largest tax reform the nation has seen.

Others including Hyderabad Wholesale and Cut Piece Merchants Association, Textile Traders Association and Jharkhand Wholesale Clothes Traders Association are also not in favor to levy tax on textiles.

Changes proposed under GST in Textile Industry

The Indian textile industry contributes about 10 per cent of the total annual export and this value is expected to rise under GST. Cotton and wool (natural fibres) which earlier used to attract zero central excise duty, will now be taxed at 5 per cent. Silk and jute will not be taxed. 18 per cent GST would be levied on man-made or synthetic fibre yarn. While apparels which used to attract 6 to 7 per cent before will now be taxed at about 12 per cent. Apparels priced below Rs.1000 would be under the 5 per cent tax slab whereas, those priced above Rs.1000 would be taxed 12 per cent under GST.

CITI

J. Thulasidharan Chairman of Confederation of Indian Textile Industry (CITI) has urged the Union Finance Minister, Arun Jaitley and Hasmukh Adhia, Secretary of Ministry of Finance, for reducing GST rates on moisture management fabric (MMF) and yarns from 18 to 12 per cent.

“It would prevent seamless flow of input tax credit and allow breakage of value chain. High rates on MMF and synthetic yarns would inevitably affect the actions and incentives of the small and medium-sized enterprises (SMEs) of the textile to remain in the business,” said Thulasidharan.

While the textile traders are opposing the move, many are of the view that with this rate, Indian producers will become more competitive in the world which would enable the textile export business to bloom globally.