Textile traders in Telangana have launched a postcard campaign opposing the proposed hike in Goods and Services Tax (GST) on textiles and certain apparels from January 1.
With ‘Save textiles trade, roll back increase in GST’ stamped on them, the postcards are addressed to Prime Minister Narendra Modi, Union Minister of Finance Nirmala Sitharaman, Union Minister of Textiles Piyush Goyal and Chief Secretary to the office of the GST Council Secretariat.
“We are expecting 40,000-50,000 postcards from across the State to be sent,” Telangana State Federation of Textile Associations leader Prakash Ammanabolu said. Many of the member-associations such as Secunderabad Cloth Merchants Association, which posted 3,000 letters in a day, are through with the campaign, the remaining will be sending the postcards in another 2-3 days, he said.
Expressing concern over the more than two-fold increase in GST from 5-12% on textiles and garments, he said the change will impact all those in the textile trade, be it wholesalers or retailers. In particular, it will hurt the small shops in semi-urban and rural areas and their customers, as the government has decided to levy 12% on garments priced below ₹1,000.
The decision to increase the levy is only bound to make matters worse for the textile trade whose business was “badly affected” due to the pandemic. Compounding the worries is Omicron, the new variant of Coronavirus. A higher rate of tax would also translate into more working capital getting blocked as the wholesale textile trade is a credit-oriented business. From 3-4 months previously, the time frame for realising payments from the retailers has increased to 6-8 months after the pandemic, Mr. Ammanabolu said, adding the higher levy may also result in evasion.
He said there were 75,000-1 lakh textile shops, both wholesale and retail, in Telangana, of which about 80% are small shops.