A day ahead of the
GST council meeting, Telangana State Federation of Textile Associations (TSFTA)
termed the decision to hike GST on textiles from 5% to 12% with effect from
January 1, 2022, as a ‘surgical strike’ on the textiles sector that has already
been reeling under the effects of the pandemic and urged the government to
withdraw the proposed hike with immediate effect.
Out of about one lakh textile traders, 9% already downed shutters due
to pandemic; Telengana employs over 1 crore people in textile sector
Ammonabolu Prakash pointed out that there are around 75,000 to 1 lakh textile
traders in Telangana and in the last 19 months, 9% have already downed shutters
due to the impact of the pandemic. “Any increase in GST on textiles at this
juncture will lead to lakhs of small retail shops and vendors across the state
losing their jobs,” he said, adding that a majority of the people that are
employed by the textiles sector are semi-skilled workers from the rural as well
as tier 2-3 centres. He said that in Telangana, the textile sector employs,
directly or indirectly, over 1 crore people.
Wholesale textile trade especially credit-oriented
Prakash pointed out that even prices of raw
material such as cotton, yarn, fabric, dyes and packaging material, among
others, have spiked over the last six months by around 30-40% and any added tax
burden will only make the business as well as manufacturing activity
unsustainable and even hit demand. He said that the textile trade, especially
the wholesale business, is a credit oriented business.