KTR to Centre: Reconsider decision to increase GST on textiles, handlooms

Textiles Minister KT Rama Rao on Thursday demanded that the union government withdraw its decision to increase GST on textile and handlooms sector.

In a letter to union Finance Minister Nirmala Sitaraman, the Minister appealed to her to take up this proposal forward in the GST council meeting which will be chaired by her on Friday.

Pointing out that industry and the weavers’ community had staged several protests demanding waiving of the existing five per cent itself on handloom products and raw material, he said instead of taking up their issue, the union government was planning to increase it to 12% from January 1 which will sound the death knell for the industry and lakhs of people will lose their jobs.

“The Textile and handloom sector provides the second highest employment in our country. This sector is already bearing the brunt of Covid and the union Government has not even provided any relief to the sector. Considering the current scenario, the Centre should extend additional advantages and incentives to the sector,” the Minister said, and pointed out that the increase in GST will impact about 80-85 per cent of handloom and textile production.

As it is, costs of raw materials, yarn, chemicals, packaging material and transportation have gone up substantially post Covid, Rama Rao said. “In addition to these costs, the increase in GST will further escalate production costs by 15 to 20 per cent,” he pointed out. This, he said, would adversely impact the demand which is essential for the survival of the industry. “Due to this, there is the danger of many



textiles and apparels units closing down. There is every possibility of 15 lakh people losing their jobs in the handlooms sector due to the increase in GST,” the Minister observed.

“This will also place an additional burden on the middle income groups which usually buys garments with a budget of Rs. 1000,” he said.

The Central government, he said, had utterly failed in fulfilling the promise of providing two crore jobs every year. “It should withdraw the decision to increase the GST hike as it would impact the employment of crores of people in the handlooms and textiles sector,” he added.

Considering the pandemic, the Centre should extend all support to handlooms and textiles sector. on the contrary, it is sounding the death knell on the sectors through hike in GST which is highly condemnable, he said.

Rama Rao said the textile and handloom industry was revived in Telangana with the schemes introduced by the State government. “The increase in tax on textile and handloom sectors will badly affect the weavers’ community in Telangana as well. On behalf of the State’s weavers, I urge you not to increase the taxes,” he said.

Pointing out that farmers had already come out on to the streets and forced a rollback of the ill-conceived farm laws, Rama Rao said if the Centre fails to withdraw its decision to increase GST on textiles and handlooms, weavers across the country will repeat what their farmer brethren did.

“Telangana State will stand by the weavers and farmers in this fight against increasing GST,” he added.