Saris and dress materials that were available for only Rs 70 would cost around Rs 200 if the Centre does not withdraw 5 per cent GST imposed on the textile industry, said the president of Surat textile traders’ body, which has been protesting the new tax regime for around one month.
With little or no textile trading activity in the city for over the past 20 days, powerlooms too had shut down for five days. However, these units opened on Friday.
Owners of powerloom units in the city had joined the textile traders protest, demanding the Centre withdraw GST (Goods and Services Tax) on the industry. Before the imposition of the GST on July 1, the textile industry was exempted from taxation.
Federation of Surat Textile Traders Association (FOSTTA) president Manoj Agrawal said, “The Surat textile industry caters to rural and poor population of India by supplying cheaper saris — some costing as less as Rs 70. Now, with the imposition of GST, the cost of the saris will go up. The textile industry of Surat does not only manufacture cheapest saris, but also luxurious ones, costing around Rs 7,000. There is no major market of the cheapest and the costliest saris in India, but those priced between Rs 200 and Rs 250 are high in demand in all states. We expect that after GST, the prices of these saris will rise to Rs 350 to Rs 400. Besides GST on yarns, manufacturing and trading are taxed and the final product reaching the customers will cost more.” Until GST, those involved in the industry used to pay income tax only.
Some experts said the traders and owners of powerlooms apprehended government officials now looking into their documents and records with the industry coming under tax purview. This, they said, led to strike by weavers and traders.
According to experts, Surat mills out around 40 per cent of the country’s total synthetic fabric production and saris made from man-made fibres are cheaper and bought by the poor. A chartered accountant requesting anonymity said, “The entire textile trading and weaving sector wanted to keep themselves safe from the tax officials and for that they are protesting the GST. They don’t want any government official to peep into their business. They claim that they are paying income tax and wanted to get free from other tax structures.”
There are over 9 lakh powerlooms in Surat city and the district and weave out over 6 crore metre of cloth everyday. Over 4 lakh labourers, mostly from Uttar Pradesh, Bihar, Maharashtra, Odisha, West Bengal and Rajasthan, work in the powerloom units. The daily turnover of the powerloom units is estimated to be Rs 90 crore.
Sachin Weavers Association president Mahendra Ramolia said, “Earlier 12 per cent VAT was imposed on yarn manufacturers, but now as per the new tax regime, 18 per cent GST has been imposed on yarn, while 5 per cent on powerloom units, 5 per cent GST on traders and 5 per cent on dyeing and printing units.”
He further said, “If government is firm on implementing GST, they should tax the yarn manufacturers more. Majority of textile traders and powerloom factory owners are not much educated. We don’t want to fall into hectic work of filing returns of GST and for that we have to appoint accountants and give him salary. We have demanded that we will file return quarterly.”