The union government must roll back the increase in Goods and Services Tax rates for textiles, garments and footwear, said Madurai-based Tamil Nadu Textile Merchants Association.
In a press release, the association said that in the 45th GST Council meeting, it was recommended to increase the GST on textiles and garments from 5% to 12% with effect from January, much to the consternation of the textile merchants.
The textile industry is yet to recover from the impact of COVID-19 pandemic. In case the proposal was accepted by the government and the GST was increased, it would create a negative impact on the textile industry. It could lead to the closure of factories, outlets and shops. It would have a cascading effect on all the activities, including those carried out by the grass-root level producers.
Increasing the GST from 5% to 12% would indirectly prompt the small and medium scale players to pass the burden on to the consumers. It is the small and medium scale producers who provide employment to millions of people.
The high GST for the textile sector would indirectly affect other sectors such as hotels, travel and packaging. The union and State governments must increase the threshold limit of GST to more than ₹2 crore turnover per annum and allow inter-State transportation of goods for small non-GST enterprises. This would definitely encourage the textile industry, the release said.
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