GST concern : Unhappy Traders will not illuminate the market this year
The texile traders will not illuminate the market during Diwali festival to mark their protest against GST. The market’s buildings will not be decorated with colourful lightings during the Diwali this year first time. The market said that the central government is not accepting the demands of the textile traders on the GST. The government is not supportive and traders have decided not to celebrate Diwali festival. The GST council again has neglected their demands. Except for the relief in e-way bill and abolition of reserve charge mechanism (RCM) till March 2018, the GST Council meeting has not accepted most of the demands put forth by the traders. Traders stated that they will not be able to take the benefit of the composition scheme as the turnover for the scheme has been raised from Rs 75 lakh to Rs 1 crore per annum. Most of the traders, even the small one, will not be benefited by the scheme. The GST Council has given relief to taxpayers by filing quarterly returns, provided his turnover is less than Rs 1.5 crore per annum. In the textile sector, Rs 1.5 crore turnovers per annum is very common. Even a small trader will have this turnover. The turnover limit must be 5 crore. Moreover, wholesaler will get credit of tax collected by small traders after three month, this will enhance burden.
2-3 weeks Diwali vacation in textile industry
The MMF based textile industries of Surat will observe two to three weeks long Diwali vacation this year. After the Goods and Services Tax (GST) implementation, the MMF textile business has gone down drastically. As the demand for saris and dress material decline, grey fabrics production has gone down by 50%. Many small and medium traders have been hit hard. Almost 25 per cent of small power loom weaving units shut due to the implementation of GST.
The sources of weavers association said, the GST has broken the spine of power loom sector and weavers have unanimously decided to go on long Diwali vacation from October 18. The weavers and traders are unhappy with provisions made in new GST regime and govt. has refused their relief demand. They believe that GST has ruined the textile trade. Entire textile industry is passing through a rough patch due to GST’s implementation. As the demand is down, the fabrics manufacturers will cut the production and will shut their units for 2-3 weeks after Diwali.
Traders demands level playing field for MMF sector
The textile traders of the city are still confused over new Goods and Service Tax(GST) system and are afraid off high duty rates. Once again traders are demanding level playing field to the MMF sector vis-a-vis the cotton sector. At present, the GST on MMF yarn is 18%, while that on cotton fabric is 5%. The higher duty structure on MMF fabrics has enhanced the overall production cost and business ratio in comming down day by day. The textile traders and processors has made a presentation for level playing field for MMF sector to sectoral co-convener of GST Council Yogendra Garg last week here.
The group of traders said that the central government has divided the MMF and cotton sectors by keeping separate GST rates for yarns and fabric. Currently, the GST on MMF yarn is 18%, while that on fabric is 5%.
Where as for cotton yarn and fabric, the GST rate is uniform at 5%. They demanded that the council must seriously consider providing a level playing field to the MMF sector vis-a-vis the cotton sector. Polyester fabric is known as the fabric of poor. Surat’s textile sector manufactures Sarees and dress of low cost. On the other hand, the cotton fabric is for the elite class.
They said that entire polyester textile sector is facing a lot of difficulties and challenges due to the differential GST structure for the MMF sector. Most of the weaving units doing job work has almost shut the shops. More than 50,000 workers have been rendered jobless in the last two months. They have requested keep the GST rates uniform in both the sectors. They explain that If the GST rate in both the sectors are uniform, then the textile sector will have a level playing field in the consumer market.
