STextile markets in and around Gujrat have opened after textile traders called off their strike against the implementation of five per cent Goods and Services Tax (GST) on fabrics. The strike was called off after Union finance minister assured Surat and Ahmedabad textile market representatives of looking into their demands.
“ During the meeting, Jaitley assured us that the issue of the GST on fabric will be taken up in the next GST Council meeting to be held on August 5. Thus, we have decided to call off the strike till that date ”said a textile trader.
As per Government zero GST on fabrics will break the input tax credit chain and as a result, manufacturers of garments/made-ups won’t get credit of tax on previous stages. Another consequence of scrapping GST on fabrics, the government said, is that it will result in zero rating of imported fabrics, while domestic fabrics will continue to face input taxes. This will make domestic industry lose competitiveness to in global market.
”If no favourable decision comes in that GST council meeting, we will think of going on strike again to raise our demand for abolishing the five per cent GST,” say the traders, according to an agency report.
During their meeting with the finance minister, textile traders asked for time of around 18 months for implementing GST. They also demanded making the entire GST procedure simple and relaxation of filing returns from three times a month at present to once in every quarter. The representatives also suggested that the GST rate on yarn be increased while keeping the remaining chain free from the GST. Jaitley said that the GST could not be removed, but their other demands would be discussed in the upcoming GST Council meeting on August 5 in New Delhi.