Telangana: GST revision on handlooms will be deathblow to industry

Hyderabad: Handlooms and Textiles Minister KT Rama Rao on Sunday urged the Centre to withdraw its plans to revise GST from 5 per cent to 12 per cent on textiles and handlooms from January 1, 2022.

In a letter to Union Textiles Minister Piyush Goyal, Textiles Minister Rama Rao appealed to the Union Minister to withdraw their GST plans in the wake of textiles and handloom sector going through a tough phase for the last two years due to Covid pandemic. At this juncture, revising the GST from the current 5% to 12% would serve as a deathblow to the industry, he said in the letter.

'After the agriculture sector, textiles and handlooms sector provide highest employment in the country. Considering the current scenario, the need of the hour is to extend additional advantages and incentives to the sector,' KTR noted. He observed that the decision to increase GST on textiles and handlooms was not wise. Never in the country's history were taxes levied on handlooms and the Centre's move to levy 5 per cent tax was strongly opposed by the textiles and handlooms sector across the country, he reminded. "The current decision to impose an additional seven per cent GST on the handlooms would leave the sector crippled. Telangana produces world-class handlooms and weavers are worried a lot due to the Centre's decision to increase GST," said KTR.

The Minister said that almost 80 per cent of the units were in the MSME segment. Fixing the rate at 12 per cent for fabrics and garments and increasing the rate to 12 per cent for fabrics would hit the power loom and handloom weavers. Adding to this, it would only lead to higher prices for the common people, he said.

KTR said that increasing GST on handlooms would be a mistake, because one huge advantage that India has during times when people all over the world are getting conscious of handmade, natural fibres and eco-friendly processes, is that it already has millions of people, who are skilled in these process. "It's time when we should be investing in them and target an international market growth for handloom and natural fibre. Instead, we are trying to drive them out of existence," said Minister KTR.