Chennai: While urging the Centre to reverse the GST hike for textile and maintain it at present five per cent rate, Tamilnadu Finance Minister Palanivel Thiagarajan said alternatively, readymade garments having sale value of above Rs. 3,000 or Rs. 5,000 be taxed at the higher rate of 12 per cent.
In his speech at the meeting of GST Council in New Delhi, which was chaired by Union Finance Minister Nirmala Sitharaman, he said the proposed hike in GST on textile from five per cent to 12 per cent could not have come at a more inopportune time when the industry is limping back to normalcy from the onslaught of Covid-19 pandemic.
Stating that textile industry in Tamilnadu is a forerunner in providing employment in the State, he said the handloom sector which is barely surviving on the subsidies granted by the State government will not be
able to absorb this blow due to the increase in GST.
The representation of the associations that the increase in GST would cause large scale unemployment in the weaving industry due to non-availability of additional loans and working capital has great merit, the Minister said and urged Ms Nirmala Sitharaman to consider reversing the hike in GST.
‘Alternatively, it may be considered that readymade garments having sale value of above Rs 3,000 or Rs 5,000 be taxed at the higher rate of 12 per cent and allow the present rate of five per cent on textiles below this level’, he added.
Thanking Nirmala Sitharaman for arranging the meeting to discuss the important agenda item on putting on hold the proposed hike in GST on textile from five to 12 per cent, Palanivel Thiagarajan said Tamilnadu was one of the major States producing handloom, powerloom textiles and hosiery goods in the country and this sector was next only to the Agriculture in terms of employment generation.