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Indian textile MSMEs and traders demand withdrawal of GST hike

Resentment among small traders and micro, small and medium enterprise (MSME) unit owners is increasing as the date of implementation of the hike in Goods and Services Tax (GST) is drawing near. The demand for withdrawal of the increase in GST rate from 5 per cent to 12 per cent on handlooms and textiles is now being heard from different parts of India.

Small businessmen and industrialists of Punjab and other states are protesting in their cities and are planning to protest in Delhi, according to a source. Traders, manufacturers, and even political bigwigs from a few states including Punjab are regularly sending 

representations to the Union Government asking it not to increase GST on handloom and textiles from January 1 onwards as it would be a “blow and blunder” to industries.

To protest against the proposed move, the traders and shopkeepers held a convention on Monday. Ludhiana-based businessman Tarun Jain Bawa said GST on garment, textiles and footwear was increased earlier from 0 per cent to 5 per cent and now, from January 1, it is going to be increased to 12 per cent, which will ruin the businesses. He said the move will benefit corporate houses at the expense of small industries.

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Separately, a group of around 90 traders and industrialists from Ludhiana came to Delhi and met government official and political leaders. A businessman from the group said that the new GST rate would make domestic products expensive compared to Bangladesh. Even survival of the industry will become difficult as China also sends its stocks to India through Bangladesh. Therefore, “the government needs to think about the future of industry in the country.”

Meanwhile, KT Rama Rao, the minister of industries from the southern state of Telangana, has written a letter to textiles minister Piyush Goyal stating that for the past two years, the handlooms sector has been going through a difficult phase due to the coronavirus pandemic, an official release said.

“At this juncture, revising the GST (rate) from the current 5 per cent to 12 per cent would serve a death blow to the industry," said Rama Rao. After agriculture sector, textiles and handlooms sector provides highest employment in the country. “The current decision to impose additional seven per cent GST on the handlooms would leave the sector crippled. Telangana produces world-class handlooms and weavers are worried due to the Central government’s decision to hike GST rates,” the letter said.