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Last updated: 25 Nov, 2021  

gst-thmb.jpg Traders up in arms against 12% GST on textiles, footwear

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SME Times News Bureau | 25 Nov, 2021
The Confederation of All India Traders (CAIT) said that instead of simplifying and rationalising the GST tax structure, the GST Council has made it as "most complicated GST law in India over the world" and much against the GST structure shown to CAIT by the then Finance Minister Arun Jaitley.

CAIT National President B.C. Bhartia and Secretary General Praveen Khandelwal said that in the cotton textile industry there was no inverted tax structure, then why fabric and other cotton textile goods were brought under the 12 per cent bracket.

Even in the man-made textile industry, at the stage of manufacturing garments, sarees and all types of made ups, there was no inverted tax issue. Without having any understanding of the stages of the textile industry such a harsh decision will be a regressive step.

The Central Government's notification to increase the rate of GST on basic items like textiles and footwear from 5 per cent to 12 per cent is being opposed all over the country, including Delhi, and the CAIT has decided to launch a mega agitation across the country against such arbitrariness.

The agitation will be led by two important trade associations of cloth trade, namely Delhi Hindustani Mercantile Association and Federation of Surat Textile Association (FOSTA) under the umbrella of CAIT. Apart from textiles and footwear, trade organisations of all types of trade, workers, employees associated with them will also participate in it.

Bhartia and Khandelwal said, "Roti, Kapda & Makaan are three basic things of life. Bread has already become very expensive due to high rise in prices, buying a house is beyond the reach of a common man and the cloth, which was accessible, has also been made expensive by the GST Council.

"After all, what kind of treatment is being done to the common man of the country. In this matter not only the Central Government but also the State Governments are completely guilty because these decisions have been taken unanimously in the GST Council and no one has opposed such an irrational decision," CAIT said.

They have demanded that the increased rate of GST on clothes and footwear should be withdrawn immediately. They said that retail trade in the country has already been destroyed due to Covid and now that the business was resuming on track from this year, the increase in the GST rates will be the last nail in the coffin of the trade, CAIT said.

Bhartia and Khandelwal said that according to sources, it has been learnt that the Fitment Committee of GST has recommended an increase in the GST rate on gold jewelry from 3 per cent to 5 per cent and the current tax rate in GST 5 per cent has been recommended to 7 per cent, 12 per cent to 14 per cent and 18 per cent to 20 per cent. They said that this proposed increase in tax rate is highly irrational and unjustified and is clearly arbitrary action by the fitment committee.

In the matter of increase in clothes and footwear, no consultation was done with any stakeholder of the country. GST is being distorted continuously and the concept of "One Nation-One Tax" has been made a joke.

They said that traders across the country have mobilised against this unilateral and arbitrary increase against which the traders across the country are in great anger and resentment.

To decide about the future strategy of the agitation, the CAIT has convened a video conference on November 28 with the leaders of textile and footwear trade across the country, which will also be joined by prominent trade leaders of all States.

Bhartia and Khandelwal said that it is very unfortunate that the GST which was talked and explained to CAIT by the then Finance Minister Arun Jaitley, who by soliciting the support of trading community on June 4, 2017 was a simple tax structure having minimal compliance, but has been blown up and replaced by a very complex GST tax system. Prime Minister Narendra Modi's announcement of Ease of Doing Business and One Nation-One Tax is being openly ridiculed, CAIT said.

CAIT said the officers have become autocratic and either the command of the responsible leaders has become lose or they are also involved in torturing the traders. Traders across the country will no longer tolerate this situation.
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