Levy of 12% GST on Textiles: Request for withdrawal of the hike by the Confederation of All India Traders

 

Confederation of All India Traders

‘Vvapar Bhawan’

925/1, Naiwala,  Karol Bagh,

New Delhi.110005.

Phone: .91-11-45032664 Telefax: 91-11-45032665

Ref. No.: 3360/1/50

 10th February, 2022

Snit Nirmala Sitharaman

 Hon’ble Minister for Finance

 Government of India New Delhi

 

Dear Smt Nirmala Sitharaman Ji,

 

Sub : Levy of 12% GST on Textiles : Request for withdrawal of the hike

 We invoke your kind and immediate attention towards the decision of the GST Council taken on 31st December,2021 in its 46th meeting decision to defer the proposed hike in tax rate for the textiles sector to 12 percent from 5 per cent, which was to be implemented from January 1.

Status quo is being maintained currently for the GST rate for textiles till the next meeting of the GST Council which may happen in the month of February.

Since, the proposed hike is in abeyance stage, we shall request you to withdraw the implementation of tax rate hike in the larger interest of consumers of the Country as such hike will loaded an extra burden of 7% tax rate on general consumers and will also hit the traders by blocking their capital with the department in the shape of refunds.

We take this opportunity to add that there was no tax on Textile/Fabrics for a number of years.

Bringing the textile Industry back under the tax net itself was a big blow to the entire textile Industry The trade associations across India led by CAIT had made representations immediately after the last GST Council meeting wherein it was proposed to correct the inverted duty structure on textile.

 It was requested by the trade and industry that the Status quo be maintained @ 5% and the rate be reduced from 12% to 5% wherever applicable. This view of the traders was also sup­ported by Union Textile Minister Shri Piyush Goyal who categorically assured a CAIT delegation that his Ministry is in favour of keeping the textile under tax rate of 5% and the Ministry has already informed the Finance Ministry about the view of the textile ministry.

The increase in GST rates on textile will not only add to the financial burden on end users but will also affect small business men badly and will encourage evasion of tax and various malpractices being undertaken by habitual offenders of law.. Further, the goods which are lying in stock of the businessmen and sold on MRP the additional burden of 7% will be on the businessmen.

 This increase in tax rate will not only hamper the domestic trade it will affect the exports adversely. Already the textile industry is not at a competent status with Countries like Vietnam, Indonesia, Bangladesh and China.

On the one hand the Government talks about Make In India and Atmanirbhar Bharat on the other hand levying such high taxes creating an atmosphere of uncertainty and gloom

Under such circumstances, we request you to please pursue our request in the forthcoming GST Council meeting and relieve the trade from levy of 12% tax rate of GST on textile.

We are sure that it will receive your kind and immediate attention and you will be kind in accepting our humble sug­gestion. Thank You. With kind regards Truly yours Praveen Khandelwal National Secretary General Confederation of All India Traders