Ludhiana City traders on Thursday voiced their unhappiness with the union government decision to increase the Goods and Services Tax (GST) on fabrics, garments and hosiery—between 5 to 12%—from January 1, saying that the move will lead to a near-20% hike in the prices of the finished goods.
Fearing losses, the hosiery traders complained that the industry is already going through a slump due to the pandemic and the central government’s move will further affect business.
They added that the customers, especially the ones belonging to the low income group, will also be impacted before demanding that the government reconsider its stance.
The traders in the hosiery hub of the state criticised the central government’s indifferent attitude, saying that their representatives have forwarded multiple messages but have received no response.
Punjab Cloth Merchants Association (PCMA) president Sonu Nilibar said, “On an average the prices of garments including ‘Saree’ will be increased by around 20% and the GST rate of thread/fabric/garments has been increased by 7%. The purchasing capacity of the customers has already been reduced during the pandemic due to financial constraints and the government has put an additional burden.”
The traders further accused the government of ignoring the needs of the textile sector, which is the second largest employment generator in the country, to benefit the big corporate houses.
{{/usCountry}}The traders further accused the government of ignoring the needs of the textile sector, which is the second largest employment generator in the country, to benefit the big corporate houses.
{{/usCountry}}Akalgarh Market Garment Association president Manpreet Singh Bunty said, “The prices of garments will increase at least by 20 percent and with the prevailing financial condition in the market, the trade will be badly impacted. The government is only concerned about the big houses and small traders and the public has been completely ignored.”
The hosiery traders, meanwhile, stated that the move has hit the sector even harder as they were suffering in terms of sales during the winter season.
Knitwear and Textile Club president Vinod Thapar said, “The market is already moving through a slump this winter and this can be judged from the fact that many companies have already announced sales. The increase in prices of the products will further reduce the margin for the manufacturers, as the customer will not pay higher and the manufacturer will have to bear the losses from his own pocket. The government should reconsider the decision.”
Thapar added that the central government’s move is also expected to increase the cases of bogus billing.
Traders pin hopes from GST council meet
PCMA president Nilibar said garment traders across the country had high hopes that the government will slash the tax rate during the GST council meeting scheduled to be held under chairmanship of union finance minister Nirmala Sitharaman on Friday.