GST Shrinks Diwali Sales Of Surat Textile Units To 20 Per Cent Of Normal Business

Trade & Policy

GST Shrinks Diwali Sales Of Surat Textile Units To 20 Per Cent Of Normal Business

Despite the latest revision in Goods & Services Tax (GST) rates announced on October 6, the Surat textile market’s peak Diwali season sales dispatch was only 15% to 20% of normal business, traders said.

Every year, normal business of Rs 10,000 crore to Rs 12,000 crore is transacted during Diwali through dispatch of 1,500 trucks daily during a fortnight, worth Rs 60 lakh each.

However, this season, business came down to merely 20 per cent, according to traders who will soon decide whether they should call for a strike on October 25.

Not only did orders dry up during Diwali, especially from North and Central India based wholesalers, but Surat based traders have also been burdened with an unsold inventory worth at least Rs 500 to Rs 800 crore, according to traders.

This year, around 150 wholesale textile markets did not celebrate Diwali deliberately did not illuminate their offices across 150 of 250 textile markets, traders said.

Several weavers are yet to decide whether to resume production or not and this could lead to an extended vacation in the power loom industry, according to an industry source.

Surat is a synthetic fabric production hub, which is home to 650,000 power looms, around 200 wholesale textile markets, besides 20,000 manufacturers, which includes 10,000 weavers, 75,000 traders, 450 processing units, as well as around 60,000 embroidery machines.