Textile industry downs shutters to protest GST

SURAT/AHMEDABAD: The textile industry in Gujarat came to a screeching halt on Thursday as thousands of businessmen and traders observed a complete shut-down to demand exemption from the Goods & Services Tax (GST) proposed to be rolled out from July 1.

In Surat, the country’s man-made fabric hub, around 65,000 shops and textile markets as well as most powerloom weavers observed a complete bandh. The bandh call was Vyapari Sangharsh Samiti (VSS) and

Federation of Surat Textile Traders Association

(FOSTTA) along with 180 trader associations across the country.

VSS president Tarachand Kasat said, “We don’t want GST in textile sector but a turnover tax. No trader will be taking GST registration. We are pinning hopes on the June 18 GST Council meeting and if there is no favourable outcome, we will meet finance minister in Delhi between June 20 to June 26.”

Traders say there are complexities in the GST rates, especially on the man-made fabric (MMF) sector. While cotton attracts a uniform 5% rate, the synthetic fabric attracts 18 % at yarn stage, 5% at fabric stage and 5% at the job-work stage. Moreover, the option for claiming input tax credit (ITC) has been removed for the sector.

Out of the total 5.11 lakh traders registered under VAT in Gujarat, close to 92% or 4.64 lakh have already registered themselves under GST.

Ready-made garments shops in Rajkot, Amreli, Gondal and food grain merchants too observed a shut-down. The traders also took out rally in Rajkot city and shouted slogans against GST.

In

Patan

, the

Agriculture Produce Market Committee

(APMC) and cloth market supported the bandh along with those from Mehsana APMC and Deesa cloth traders.

Besides cloth merchants, electronics dealers, dry fruit and grain traders also joined the bandh for their respective industries as well as compliance-related issues. In Ahmedabad, around 50,000 cloth shops including wholesalers remained closed, said Gaurang Bhagat, president, Maskati Cloth Mahajan.

Hitesh Pariyani, chairman, Dry Fruits Association-Gujarat, said, “Nearly 5,000 dry fruits and kirana dealers in the state downed their shutters. The 12% GST on all dry fruits except cashews will only force traders to increase prices. We have demanded 5% GST.”

Industry experts claim that traders have strategically scheduled their protests ahead of the GST council meeting on Sunday.

“Around 500 members of our association have joined the protest against government’s stringent norms over GST compliance. There is too much paper work and small traders are going to face immense difficulties. Moreover, 28% GST on electronic goods and appliances is too high which will further hit the already slowing down market,” said Sunil Motwani, vice president, Relief Road Electronics Dealers Association.