Surat textiles deteriorating under GST, asks government for solutions
Surat textiles, the key hub of powerloom weaving is facing severe crisis ever sincet the new GST regime came into force from 1 July 2017, completing 11 months now. The Surat textiles industry has urged the Union government to conduct a detailed survey on the impact of Goods and Services Tax (GST). The new GST regime came into force from 1 July 2017, and 11 months have been completed.
In a letter to Prime Minister Narendra Modi, the power loom industry leaders stated that the condition of weavers has deteriorated post GST. Over 50,000 workers have lost their jobs in weaving and over 4 lakh have been rendered jobless in the entire textile value chain in the city.
Since November 2017, at least 1 lakh power loom machines have been sold in scrap and weavers have been forced to reduce production of man-made fabric (MMF) by operating in the single shift of eight hours.
President of Pandesara Weavers Association Ashish Gujarati said, “The textile processors, yarn spinners and embroidery units are allowed to claim ITC refund, but when it comes to weaving, there is a clear discrimination by the central government.”
According to Gujarati, the average ITC refund amount per loom per year comes to around Rs 7,000. The city has six lakh power loom machines and the total annual ITC refund amount is pegged at Rs 420 crore.
“Production cost of MMF per metre in Gujarat is 50% higher compared to Maharashtra. Units investing Rs 10 crore in Maharashtra are getting Rs 5 crore subsidy from the government, whereas those investing in Gujarat are getting capital subsidy of just Rs 2.5 crore,” Gujarati said.
Mayur Golwala of Sachin Powerloom Association said, “Due to non-refund of ITC, capital investment in new machines has been hampered. The cost of raw material for decentralized unit is almost six per cent more compared to the integrated units.”
Golwala added, “The government should immediately conduct a detailed survey of Surat’s weaving sector and provide us with the long-term solution. Otherwise, the industry will die a slow death.”
Various sources
