Telangana government has urged the Centre to drop its plan to hike the GST on textiles and handlooms from 5 to 12% from January 1 because the sector is going through a tough phase due to the impact of pandemic.
In a letter to Union Textiles Minister Piyush Goyal, Industries Minister K.T. Rama Rao observed that taxes were never levied on handlooms in the country’s history. The Centre’s move to impose 5% tax initially was strongly opposed by textiles and handlooms sector across the country. The latest decision to impose additional 7% cent GST on the handlooms would leave the sector crippled, he said.
Telangana produces world class handlooms and weavers are worried lot due to the Centre’s decision, he observed.
The Minister also said almost 80% of units in the sector were in micro, small and medium enterprises segment. Fixing the rate at 12% for fabrics and garments would hit the powerloom and handloom weavers. It will have a cascading effect on common public due to higher prices, he said.
India has the advantage of millions of skilled people working in eco-friendly processes, natural fibres and handmade garments. By hiking GST, the country will be driving them out of employment when it should actually be investing in them and target international market.
Mr. Rao said the new generation is not attracted to handlooms sector anymore because of low profitability and critical conditions. The families dependent on handlooms had shrunk from 43.3 lakh in 2011 to 30.44 lakh presently. Nearly 25% of families left the industry and if the trend continues, the handloom sector could become extinct in a few years, he warned.
The latest figures show that 70% of handloom weavers are SC, ST, BC and OBCs. Almost 72% of them are women and 77% did not go beyond school education. Therefore, they are not expected to be aware of tax issues and critical conditions of the industry.
The income of 67% of families is less than ₹5,000 and 26% of families earn less than ₹10,000. On the whole, as much as 93% of families earn less than ₹10,000. Therefore, it is not wise to hike taxes on products produced by them, he said.
