Gujarat clusters demand GST exemption on yarn, fabrics

16 Jun '17

2 min read

Textile clusters in Gujarat have demanded the government to exempt yarn and fabrics from the Goods and Services Tax (GST). In order to oppose the Centre's proposal to levy 5 per cent GST on these two items, various cloth markets in cities like Surat, Ahmedabad, Rajkot, Bhavnagar, Jamnagar and Junagadh in the state observed a day-long bandh on June 15.

Over 50,000 cloth shops including semi-wholesalers and wholesalers kept their shutters down in Ahmedabad, said media reports quoting Gaurang Bhagat, president of Maskati Cloth Mahajan, a cloth traders' association in Ahmedabad.

Imposing 5 per cent GST on yarn and fabric will be troublesome for cloth businesses and the GST process is lengthy, according to Bhagat. He added that yarn and fabric have traditionally been exempted from sales tax and VAT since 1957 and GST on them is uncalled for.

Bhagat said that the government should levy GST on cotton and raw material instead of processed cloth. The members of the association have also been asked to not register for GST until the next Council meeting on June 18, when the government is expected to review the matter.

The appeal to keep the shops closed on June 15 was given to extend support to bandh calls made by other textile bodies. Bhagat added that representatives from the textile industry will make a presentation on their demands before the government. (KD)

Fibre2Fashion News Desk – India

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