Industry reiterates to withdraw the proposed GST tax on textiles

The Confederation of All India Traders (CAIT), the leading industry body, has urged Union Finance Minister Nirmala Sitharaman to withdraw the proposed GST tax on textiles. Currently, the textiles sector is being taxed at 5 per cent tax rate.

Notably, there was no tax on textile or fabrics for a number of years.

Last year, in the GST Council meeting, it was unanimously decided to defer the hike in tax rate on textiles from 5 per cent to 12 per cent.The matter was sent to the tax rate rationalisation committee, which will submit its report this month.

Just a few days back, a delegation also met Chief Minister of Karnataka, BS Basavaraj Bommai, who is Chairman of the GOM formed by the GST Council, in this regard and urged the same.

BC Bhartia, National President and Praveen Khandelwal, Secretary General of CAIT said in a statement, “The proposed hike, which is in abeyance stage, should be withdrawn in the larger interest of consumers of the country as such hike will load an extra burden of 7 per cent tax rate on general consumers and will also hit the traders by blocking their capital with the department in the shape of refunds.”

CAIT further added that the increase in GST rates on textile products will not only add to the financial burden of end users, but will also badly affect small businessmen,besides encouraging evasion of tax and various malpractices being undertaken by habitual offenders of law.

“Bringing the textile Industry back under the tax net itself was a big blow to the entire textile industry. The trade associations across India led by CAIT had made representations immediately after the last GST Council meeting wherein it was proposed to correct the inverted duty structure on textile,” CAIT said.