Hyderabad: Claiming that lakhs of organised traders and unorganised sellers would be affected by the GST, textile traders have called for a three-day strike against levying five per cent on textiles. The bandh would be from June 27 to 29.
“Initially, the GST Council had decided to levy Goods and Service Tax only on products which are covered under VAT at state level or under excise duty at the Centre. Those products, which are not covered under above categories, are to be exempted. Since textiles were never taxed in independent India, it was expected to be exempted. However, due to lobbying by 10 major textile manufacturers who wanted to claim input credit, the Council imposed GST on textiles at the last moment,” said Mr Ammanabolu Prakash, the president of Telangana State Federation of Textile Associations.
The move to tax textiles would affect lakhs of organised and unorganised traders. “Almost 30 per cent of our sales is on credit. And the GST rules make it cumbersome process for small traders,” he said.
Under the GST rules, the supplier who sells his goods on credit — repayable in instalments — must collect the entire tax component during the first instalment and pay it to the government. If the buyer wants to return the product, the seller need to repay the money immediately to the buyer, but the tax refund from the government may take time.
It would bring into tax bracket lakhs of home-based textile sellers, who cater to mostly the poor sections of the society. This, Mr Prakash said, will increase the price of textiles for the poor also as these sellers would have get themselves registered and hire services of professionals for filing complicate tax returns.
“In textile business, only 11 per cent of shops in the country have computers, while others neither have computers nor any knowledge of computers,” he explained.
