KTR Urges Centre to Reconsider Decision on GST Hike

Minister KTR demands Union Government to reconsider the decision of increasing GST on Textiles and Handlooms sector

IT and Industries Minister KTR demanded the Union Government to withdraw the idea of increasing the GST on textile and handlooms sector. In a letter to Union Minister Nirmala Sitaraman, Minister KTR appealed to not take this proposal forward in the GST council meeting which will be chaired by the former tomorrow. 

The industry & weavers community has staged several protests demanding the Union Govt. to waive off GST on handloom products and its raw material. Instead of waiving off the 5% GST on handloom products and its raw material, the Union Govt is planning to increase it to 12% from 01/01/2022, which will sound a death knell to the industry and lakhs of people will lose their jobs. 

The Textile and handloom sector provides the second highest employment in our country. This sector is already bearing the brunt of COVID and the Union Government has not even provided any relief to the sector. Considering the current scenario, the Centre should extend additional advantages and incentives to the sector, said KTR. 

The increase in GST will impact about 80-85% of the handloom and textile production. 

As it is, costs of raw materials, yarn, chemicals, packaging material and transportation have gone up substantially post covid. In addition to these costs, the increase in GST will further escalate the production costs by 15 to 20 per cent.

This would adversely impact the demand, which is essential for the survival of the industry. Due to this, there is danger of many textiles and apparels units closing down. There is every possibility of 15 lakh people losing their jobs in the handlooms sector due to the increase in GST, the Minister observed.

“This will cost an additional burden on the middle income groups, which usually buy garments with a budget of Rs.1000,” he said.

The Central Government, which had utterly failed in fulfilling the promise of providing 2 crore jobs every year, should withdraw the decision to increase the GST hike as it would impact the employment of crores of people in the handlooms and textiles sector, he suggested.

Considering the covid pandemic, the Centre should extend all support to handlooms and textiles sector. But on the contrary, it was serving a death knell on the sectors through hike in GST. This is highly condemnable, he said.

Due to the Central government policies, the nation was registering marginal growth in the sectors compared to smaller nations like Bangladesh. All this despite there being tremendous scope for growth in the sectors and the decision to increase GST will affect getting international investments, he said.

Minister KTR stated that the textile and handloom industry was reviving with the schemes introduced by the Govt of Telangana. The increase of tax on textile and handloom sectors will badly affect the weavers community of Telangana as well. On behalf of Telangana State’s weavers, Minister KTR urged the Centre to not increase the taxes. 

Minister KTR asked the centre to reconsider the increase of taxes as the farmers and weavers across the country are against this move. 

Minister KTR stated that the farmers have already come on to the streets and forced a rollback of ill-conceived farm laws. He urged the Union Govt to immediately withdraw the decision to increase GST on Textiles & Handlooms. Otherwise weavers of this country will repeat what their farmer brethren have done.

Minister KTR stated that Telangana state will stand by the weavers and farmers in this fight against increasing GST.