Don't hike GST on cotton fabric: Industrialists to government

Shivani Bhakoo

Tribune News Service

Ludhiana, November 28

Industrialists and traders, especially those dealing with textile industry, have expressed shock over the government’s decision to hike GST on cotton fabrics from 5 per cent to 12 per cent from January 1, 2022. Those in trade believe that if this happens cotton fabric industry will vanish.

Talking to The Tribune, Bobby Jindal, dealing in the textile industry, said suppose a small factory of cotton cloth makes 1,000 kg of cloth, he will have to pay 7 per cent GST on 500 kg on daily basis, which makes about Rs 35,000 GST. How is it possible to pay this much GST? Instead of putting increased GST on fabric, 12 per cent GST should be levied on cotton yarn only, said Jindal.

Meanwhile, cloth merchants, too, have requested the government to maintain status quo on the GST on textiles, including sarees, at 5 per cent. A delegation of Punjab textile merchants met Som Praksh, Union Minister of State for Commerce and Industry, in Amritsar recently on the issue. The sole agenda was of the repercussions on increase in the GST from 5 to 12 per cent on textiles, including sarees, from January 1, 2022.

Sonu Nilibar from Nilibar Store here said this proposed increase in the GST to 12 per cent would not increase in tax collection but rather people would be indulging more in non-billing transaction.

“There would no ease of doing business what the government promises but headache, rather nightmare, for the textile fraternity as a whole. We have proposed uniformity of 5 per cent tax structure for inputs on actual user condition,” said Nilibar.