Textile Industry relieved after GST Council stays Tax hike

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Ludhiana : City businessmen into Textile and garments have heaved a sigh of relief after the GST Council, in its meeting held on Saturday, did not hike the rate of 5% GST applicable on some fabrics and garments costing below Rs1,000.

Earlier, there were hints from the central government that the 5% slab of GST would be abolished, and the minimum GST on fabrics and garments would be 12%.

Welcoming the decision, Knitwear Club finance secretary Harish Kairpal said, “We are thankful to the GST Council for not going ahead with the proposed hike in the rate of GST on certain fabrics and garments up to Rs. 1,000.”

“Had the GST been hiked to 12%, it would have destroyed the textile and garment manufacturers, who are already struggling to cope with the current scenario, where there is a huge drop in demand, both locally and internationally”, he added.

“We also request the union government to bring out a package for our industry to face this recession, which is getting worse day by day”, he added.

According to Atul Saggar, general secretary of Apparel Manufacturers Association of Ludhiana, “It’s nothing less than a big relief for us, as had the GST been hiked by 7%, it would have hiked our cost of production significantly, and we would have been forced to hike the rates of our products, and that too at a time where we are already short of orders.”

According to Sukhwinder Singh — another garment manufacturer, and member of the Ludhiana Business Forum, “The currently applicable GST of 5% on certain fabrics and garments costing up to Rs. 1,000 is already non- refundable, and when the same rate is into force for more than three years now, why did the government want to change it now.

The stand taken by GST Council is really appreciable, as the hike of 7% GST would have definitely hit the garment industry hard, and our already low sales would have dropped further had the new rate of 12% GST been imposed on us.”

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