GST Hit Surat Textile Traders Go On Extended Vacation After Dark Diwali Protest

Trade & Policy

GST Hit Surat Textile Traders Go On Extended Vacation After Dark Diwali Protest

Surat-based textile traders who observed a “dark Diwali” to protest against (Goods & Service Tax (GST) implementation by refusing to illuminate their markets, have now decided to go on a three-week-long extended vacation, local textile trade sources said.

Sources said that GST has broken the spine of the power loom sector and weavers have unanimously decided to go on an “extended Diwali vacation”, especially since demand is down and there is no point in keeping business running.

Production of grey fabrics has also gone down by 50% because of decline in demand for saris and dress material after the imposition of GST, they said, adding that recent decisions taken by the GST Council during its last meeting neglected the demands of the textile trading community.

Sources said that except for the relief in e-way bill and abolition of the Reserve Charge Mechanism (RCM) until March 2018, the GST Council ignored all their demands.

The textile trading community stated that it will is unable to benefits from the composition scheme, because the turnover criterion has been raised from Rs 75 lakh to Rs 1 crore per annum.

They stated that the GST Council’s relief of allowing traders to file quarterly returns provided turnover is less than Rs 1.5 crore has not helped them because a turnover of Rs 1.5 crore is extremely common even among small traders.

The textile trading community stated that unless the turnover limit is raised to Rs 5 crore, it would not benefit them. Besides, they stated that reduction of the GST rate on yarn from 18% to 12% would help only textile manufacturers and not the textile trading community.

Federation of Gujarat Weavers' Association (FOGWA) President Ashok Jirawala stated that the trading community had never demanded reduction of GST on yarn from 18% to 12% and this decision was taken for the benefit of spinners and textile yarn manufacturers. He also stated that the textile trading community’s demand for Input Tax Credit (ITC) refund has not been accepted so far.