GST: Bhiwandi loom owners stare at unsold stock, workers at uncertainty

Textile merchants have been protesting against a 5 per cent GST on fabric. Due to this, there is no one to buy fabric. Burdened by unsold stock, weavers have stopped operations.

Written by Priyanka Sahoo | Mumbai | Published:July 10, 2017 2:46 am
GST, Bhiwandi loom owners, textile industry in Bhiwandi, GST on textiles, indian express news  5 lakh powerlooms in Bhiwandi are lying idle. Prashant Nadkar

ON FRIDAY, Shahida Rafiq Sheikh, 42, reached her workplace at 9 am. By the end of the day, the lone breadwinner for a family of six, and her 149 coworkers at FT Textiles Pvt Ltd in Bhiwandi, were asked not to come to work from Monday. “I have over 10 lakh metres of unsold cloth in storage. I don’t have more space. Moreover, there is no yarn available amid the chaos around GST. We have been forced to close operations,” said Fayyaz Ahmed, owner of FT Textiles, which runs 5,000 powerlooms.

Shahida, a senior tester and mender, had been working with the firm for the past seven years. She earned Rs14,000 a month. With the job gone, she doesn’t know how to pay her children’s school fees or meet her ailing husband’s medical expenses. Her despair is shared by lakhs of textile workers in Bhiwandi, one of India’s largest textile hubs. An entire ecosystem of textile workers — weavers, technicians, daily wagers and labourers — has been hit hard by the implementation of GST. The industry, which had always been exempt, is reeling from the impact of being brought under the new tax regime.

Textile merchants have been protesting against a 5 per cent GST on fabric. Due to this, there is no one to buy fabric. Burdened by unsold stock, weavers have stopped operations. Over the past 20 days, around 5 lakh powerlooms are idle in Bhiwandi, said owners. The growing protest by textile merchants in Gujarat will lead to further shutdowns, they say. Ahmed said, “On the one hand, GST promises to eliminate middlemen. That is a big advantage for us. But on the other, it will increase manufacturing costs.”

Under the new tax regime, master weavers have to pay taxes for buying yarn — 18 per cent on man-made fibre yarn and 5 per cent on cotton yarn. This apart from a 5 per cent tax on services. “If we pay 5 per cent on each of the 10 services in our looms, our manufacturing cost will increase by over 15 per cent. This will not be set off by the tax levied on our product and we will have to bear the extra cost,” said Rupesh Agarwal, who owns 48 looms.

Meanwhile, workers stare at an uncertain future. Rani Pandey, a senior tester at FD Textiles, said, “My husband and I together make Rs22,000 a month. Most of it is spent on the education of out three children. We have no savings,” said Pandey. The textile industry is the second largest employment sector of the country and the largest in Bhiwandi.

Weavers, technicians and workers from Bihar, UP, West Bengal and Odisha form a large part of the workforce here. The closure of powerlooms is leading to stress migration. “Workers usually come with targets to earn a certain sum to pay off a loan or for a daughter’s wedding. Since there is no work, they have started leaving. To make them stay, we have to pay them an average of Rs 200 per day,” said Shahabuddin Sheikh, a contractor. He said when work resumes, it will be tough to mobilise a workforce immediately. Amid the confusion, Shahida hopes the powerlooms sail through the tide. “The powerlooms have to continue, or we have nowhere to go,” she said.

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  1. V
    Vish Ontoor
    Jul 11, 2017 at 12:51 am
    >>“If we pay 5 per cent on each of the 10 services in our looms, our manufacturing cost will increase by over 15 per cent" Wrong info! If these players pay proper taxes, each of the taxes could be taken as a tax credit in the buyer-supplier chain, so the taxes won't add up in a cumulative manner. GST, by design, hurts those who don't pay taxes and helps those who pay taxes. Yes, it needs a change in the way of doing business --- especially, regarding tax compliance. But GST rewards honest businessmen now. And that is a good thing for India! Why should only the poor ried class pay all the taxes in India?
    Reply
  2. L
    ladu
    Jul 10, 2017 at 9:38 am
    sabka vinash ... Modiji actual slogan. Followed by Sabko Lathi.
    Reply