Madurai-based Tamil Nadu Textile Merchants’ Association has made a representation to the Union government expressing concern over an increase in Goods and Services Tax (GST) from the existing 5% to 12% on textiles and garments.
The increase would create a colossal negative impact and affect the textile and garment trade and industry. It would also result in closure of factories and shops and lead to unemployment of crores of people, the association said.
About 85% of textile and garment shops are in the small and medium sector. Their turnover per annum was below ₹40 lakh. The increase in GST would be a huge burden for the small traders. The burden would be passed on to the consumers, which would cause inflation.
The small and medium textile and garment retailers constitute 65 % of the Indian market and would suffer from the cutthroat competition by big conglomerates. The small and medium retailers find it difficult to even afford sufficient staff strength.
The downfall of the textile and garment trade and industry would have a cascading effect on many other allied trade and industries and result in a total chaos to the economy. Any increase in GST would create a spiralling negative impact, said Tamil Nadu Textile Merchants Association secretary Ashraf Yusuf.
The Association requested the government to increase the threshold limit of GST to more than ₹2 crore turnover per annum and also allow inter-State transportation of goods for non-GST small traders and industries.
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