KTR slams the Centre for its proposed move to hike GST on textiles

Textiles and Industries Minister K T Rama Rao on Sunday lambasted the Union government for its proposed move to hike the GST on textiles and handloom products from the present five per cent to 12 per cent, effective January 1 next. “The textile and handloom sectors are already reeling under the impact of Covid pandemic and any move to increase the tax would only sound the death knell for the sector,” he said.

Urging the Centre to drop the proposal, Rama Rao, in a letter to Union Textiles Minister Piyush Goyal, said: “The proposed decision to impose additional seven per cent GST on handlooms would leave the sector crippled. Telangana produces world-class handlooms and weavers are a worried lot due to the Centre’s decision to increase GST,” he said, adding that never in the history of the country were taxes levied on handlooms.

Pointing out that no taxes were levied on raw material and finished handloom cloth before the implementation of the GST regime, the Minister said five per cent GST was



imposed on raw material and finished handloom cloth in July, 2017. Weavers across Telangana, he said, were already protesting against the levy of GST itself on the handloom sector. 

“In fact, weavers have been demanding exemption of GST on handloom since it had resulted in huge losses, forcing many to turn away from the traditional craft,” he explained, adding that the GST on handloom products was strongly opposed by weavers across the country.

Making a strong case against tax on the handloom sector, Rama Rao said that as per 2011 statistics, 43.3 lakh families were actively involved in the production of handlooms. Latest statistics, however, reveal that at present, only 30.44 lakh families were associated with handlooms. “This indicates that about 25 per cent of families have already been driven out of the sector. If this trend continues, in a few years, there is every possibility that the handloom sector will become extinct,” he said.