HYDERABAD: Industry minister KT Rama Rao has demanded the Centre to reconsider the decision of increasing GST on textile and handloom sector.
In a letter to Union finance minister Nirmala Sitaraman on Thursday, KTR appealed to the minister to withdraw the proposal at the GST council meeting which she will chair on Friday.
He said the industry and weavers community have staged several protests demanding the Centre to waive off GST on handloom products and its raw material. Instead of waiving off 5% GST on handloom products and its raw material, the Centre was planning to increase it to 12% from January 1, 2022, which will sound a death knell to 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-19 and the Centre 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.He said the increase in GST will impact 80-85% of handloom and textile production.
Costs of raw materials, yarn, chemicals, packaging material and transportation have gone up post-Covid-19. In addition to these costs, increase in GST will further escalate the production costs by 15 to 20%, he said.
Due to this, there will be danger of many textiles and apparels units closing down. “There is possibility of 15 lakh people losing their jobs in the handlooms sector due to the increase in GST,” the minister observed.
