Telengana Textiles body demands rollback of GST on textiles; calls it ‘surgical strike’

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

TSFTA president 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.