West Bengal’s hosiery, knitwear, fabric, textile traders, and garment manufacturers’ bodies have expressed concern about the Centre’s suggested plan to raise the GST basic rate from 5% to 12% on Fabrics and Garments below Rs 1,000 under the guise of a ‘Inverted Duty Structure’ beginning January 1, 2022.
According to industry insiders, the stated goal of such a modification is to address the anomaly of an Inverted Duty Structure that a limited portion of the business faces. “It is indeed disturbing that, in order to correct an anomaly confronted by one segment of the market, which accounts for less than 15% of the total Industry, the Government is proposing to implement an Inverted Duty Structure, which will affect nearly 80% of the final products to consumers,” they said.
According to industry insiders, the stated goal of such a modification is to address the anomaly of an Inverted Duty Structure that a limited portion of the business faces. “It is indeed disturbing that, in order to correct an anomaly confronted by one segment of the market, which accounts for less than 15% of the total Industry, the Government is proposing to implement an Inverted Duty Structure, which will affect nearly 80% of the final products to consumers,” they said.
“In India, the Hosiery & Knitwear including Garments Industry employs almost 11 million people, with 8 million working in the domestic sector and 4 million working in the export industry. It is believed that about an equal amount of persons are employed indirectly by the sector – in Embroidery units, Washing Laundries, the Packaging Industry, and so on “B.K. Agarwala, President of the Federation of Hosiery Manufacturers Association of India (FOHMA), stated.
“Even if the workforce shrinks by 18%, the industry is expected to lose 1.44 million jobs. An increase in taxes of up to 7% will result in significantly bigger employment losses, probably in excess of 2 million “Agarwala, who also serves as Managing Director of Rupa & Company, added. “As a result of enormous price increases in raw materials such as yarn, fabric, gasoline, packaging materials, transportation, and so on, the sector is already seeing a 15-20% price increase in the final price of the product,” said Ashok Todi, President of the West Bengal Hosiery Association (WBHA).
“Job losses, income cuts, and social and psychological catastrophes have already taken their toll on the consumer. Adding additional price increase will result in a significant drop in consumption or a move to cheaper and lower quality goods “He continued.
“Job losses, income cuts, and social and psychological catastrophes have already taken their toll on the consumer. Adding additional price increase will result in a significant drop in consumption or a move to cheaper and lower quality goods “He continued.
“The combined aim of any government and industry would be to increase the quality of consumption in society — raising costs beyond the grasp of the common person goes against this basic premise,” Todi, the chairman of Lux Industries Limited, noted.
“The Indian Hosiery Knitwear Fabric, Textile Traders, and Garment Industry is still mostly reliant on cotton. Cotton garments, including traditional wear categories like Dhotis and Sarees, make up the vast majority of clothes worn by the poorest parts of society “Sharad Bhatter, President of The Bengal Hosiery Manufacturers’ Association (BHMA), stated.
“The Indian Hosiery Knitwear Fabric, Textile Traders, and Garment Industry is still mostly reliant on cotton. Cotton garments, including traditional wear categories like Dhotis and Sarees, make up the vast majority of clothes worn by the poorest parts of society “Sharad Bhatter, President of The Bengal Hosiery Manufacturers’ Association (BHMA), stated.
“This sector is already battling to recover from the pandemic’s profound economic, societal, and psychological impact. Any additional load placed on this segment of the population will result in consumer dissatisfaction, which will be detrimental to everyone “, he explained.
“In any country with different GST rates, essential commodities, particularly those consumed by the lower sections of society, would be taxed at the cheapest slab. We will move a vital commodity from the lowest slab to a higher slab, which is unique “Arun Bhuwalka, President of the Chamber of Textile Trade & Industry (COTTI), stated.
“In any country with different GST rates, essential commodities, particularly those consumed by the lower sections of society, would be taxed at the cheapest slab. We will move a vital commodity from the lowest slab to a higher slab, which is unique “Arun Bhuwalka, President of the Chamber of Textile Trade & Industry (COTTI), stated.
