India: GST relief too late, damage already done

Surat: With assembly elections in Gujarat around the corner, the central government has gone all out to appease textile traders, weavers and those connected with the embroidery sector in the country''s largest man-made fabric (MMF) hub in Surat.In the last fortnight or so, the Centre has taken many decisions related to the Goods and Services Tax (GST) with a view to ease the burden on textile sector. From reducing GST on yarn from 18% to 12%, increasing basic customs duty by 25% to curb import of undervalued fabrics from China, and giving relief in filing of GST returns, it has gone all out to appease the textile sector.

However, industry leaders believe damage to the textile sector was done when GST came into effect on July 1 and that these late announcements are of no help to the textile sector now."Since last three years, we have been making representations to the central government to increase basic customs duty on imported fabrics. Two days ago, it took a decision to increase customs duty by almost 25%, which is a welcome step," Pandesara Weavers Cooperative Society Ltd president Ashish Gujarati said.

Gujarati added, "But most of our demands are still pending. There was no need to reduce GST on yarn to 12%, when the weavers will not be able to utilize the accumulation of input tax credit. Traders, embroidery unit owners and lakhs of women associated with embroidery business are unhappy with 5% GST."Federation of Gujarat Weavers'' Association (FOGWA) president Ashok Jirawala said, "The weaving sector is observing month-long Diwali vacation. Many workers have left the city and may not return. Most of the small weaving units may not open up after Diwali vacation. Around 70% of the textile shops are shut. The damage has been done."

 Meanwhile, textile traders hailing from Rajasthan are scheduled to meet Congress leader Ashok Gehlot on Tuesday to discuss their issues and challenges faced by small traders in the market due to GST implementation. The traders want an assurance that GST will be removed on man-made fabrics."Till now, we have out and out supported the BJP. In 2014 elections, we played a major role in popularizing Narendra Modi in Uttar Pradesh, Bihar and Odisha. We want assurance from Congress now that it will bail out traders and textile sector from the GST law," said textile trader Hitesh Sanklecha.

Source: The Times Of India, India
Friday, 01 December 2017

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