Textile Industry Shocked with increased GST Rate of 12%, Request for withdrawal

The Confederation of All India Traders made the representation to Hon’ble Finance Minister for levy of GST @12%.

The whole textile industry and trade is stunned by the government’s decision to raise textile taxes, which are the second most revenue-generating product behind agriculture. In any case, C0VID-19 wreaked havoc on the textile industry, which is currently fighting for survival. In such circumstances, the hike in textile tax rates will be another setback for the textile industry. The basic necessities of a human being are food, clothing, shelter, education, and health. Agriculture, health, and education are tax-free; however, the government provides subsidies to residential dwellings, with tax rates ranging from 1% to 5%. Clothing, which is also a fundamental need, is taxed at a rate of 12%, which is unjustified.

For several years, there was no tax on textiles and fabrics. Bringing the textile industry back into the tax net was a major setback for the entire industry. Immediately following the last GST Council Meeting, where it was suggested to fix the inverted duty structure on textiles, trade organisations from throughout India made representations. The trade and industry community requested that the status quo be maintained at 5% and that the rate be decreased from 14% to 5% whenever possible. However, instead of lowering the rate to 5%, Notification No. 14/ 2017 dated 18/11/2017 was published, which increased the tax rate from 5% to 12%. This will not only increase the financial burden on end users, but it will also have a negative impact on small business owners, encouraging tax avoidance and other malpractices. Furthermore, the businessmen will bear an additional cost of 7% on goods that are in their stock and sold at MRP. This increase in the tax rate will not only stifle domestic trade, but it will also have a negative impact on exports. With countries like Vietnam, Indonesia, Bangladesh, and China, the textile sector is already in a precarious position. On the one hand, the government preaches about Make in India and Atmanirbhar Bharat, while on the other, hefty taxes are imposed, creating an environment of uncertainty and doom.

It is requested that a single rate of 5% be implemented without any cap or category based on value, and that the notification issued increasing the tax rate from 5% to 12% be removed. This government move will not only help the economy, but it will also generate a sense of hope and security. If this request and the current position of the textile trade and industry are not taken seriously, the entire industry will be fighting for survival and will eventually collapse.

To Read the Representation Download PDF Given Below :