Telangana Textile fed strongly opposes GST increase to 12 pc

Hyderabad, Dec 29 (UNI) Telangana State Federation of Textile Associations (TSFTA) on Thursday strongly opposed the increase of GST on Textiles from 5 per to 12 per cent (120 per cent) by the Central Government from January next year.
Consequent to the Central Government announcement of increase in GST , the textile traders of Telangana held an Emergency General Body Meeting here, where more than 100 representatives of cloth merchants associations from 33 Districts of Telangana were in attendance .
Talking reporters after the meeting, TSFTA President Ammonabolu Prakash said there are about 75,000 to 1,00,000 textile traders in Telangana and if any increase in GST on Textiles at this juncture can end up in the CLOSURE of lakhs of small retail shops, vendors across the State, he cautioned.
Ever since Independence, textiles were never taxed and were always covered under exempted goods, he said Textile trade is carried out in all parts of the country including remote villages. 80 per cent of the people in this trade are un-organized and less educated. Women are working in this trade in urban and rural areas. They all choose this business to earn their livelihood because it is a free trade business and it does not require any skill.

Textile trade is a credit oriented business, particularly, the wholesale, he said after sale of goods, the payment for the same will be received only after 6 months. Whereas, the trader, under GST, needs to pay tax immediately. This will result in tremendous pressure on the trader in the form of working capital. Traders have to reinvest working capital for regular business.

Design change in fabric is very frequent since customers always look for new designs. Once the design becomes obsolete, it will become a dead stock. To sell the dead stock, the trader is forced to sell the same under cost and claiming input is a very difficult task, the President said.
As a result of massive price increase of Raw Material, such as Cotton, Yarn, Fabric, Colour, dyes, Fuel, Packaging Materials, Transportation, . the textile industry is already seeing a 15-20 percent job losses, wage cuts, social and personal traumas due to COVID-19, he said.

Increases of another 7 per cent to the prices lead to a very severe drop in consumption thereby the small traders are forced to shut down their shops. This leads to huge unemployment, he pointed out.
The Supreme Court in its order in the matter of textile manufacturer’s request asked the Central Government to cure the disease. But the Government has chosen a surgical strike on textile traders, he said.
The increased rate of GST on textiles will be rolled back to 5 percent, failing which, the trade will collapse creating chaos and huge unemployment, he added.