The textile sector has got some relief as GST on yarn has been reduced from 18 per cent to 12 percent. Basic customs duty has been increased by 25 per cent to curb imports of undervalued fabrics from China. Filing GST returns has been simplified.
However, the sector feels more needs to be done. For instance, there was no need to reduce GST on yarn to 12 per cent when weavers will not be able to utilize the accumulation of input tax credit. Traders, embroidery unit owners and lakhs of women associated with the embroidery business are unhappy with the five per cent GST. Textile traders from Rajasthan want the GST on manmade fabrics to be scrapped.
In Gujarat, the weaving sector is observing a month-long Diwali vacation. Most small weaving units may never open and around 70 per cent of the textile shops are shut. Many weavers have elementary education. They have to fill forms, observe procedures and other formalities. So far they have been only accustomed to direct selling, either to the regular trader or a customer, and have not dealt with paper work of any sort. Though silk and jute remain at zero per cent, synthetic fiber yarn gets taxed at 18 per cent.