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GST Impact: After 'Dark Diwali', textile traders now on extended vacation

Tuesday October 24, 2017 10:49 AM, & Agencies

Surat Textile News

Textile traders in Surat who observed “Dark Diwali” to protest implementation of GST (Goods and Service Tax), refusing to illuminate the market during the festival of light for the first time have now decided to go on 2-3 weeks long extended vacation.

“GST has broken the spine of power loom sector and weavers have unanimously decided to go on long Diwali vacation”, sources at local textile associations said while talking to

“Entire textile industry is passing through a rough patch due to GST. As the demand is down, there is no sense in running the business”, sources said.

According to market insiders, the textile trade has gone down drastically after the implementation of GST hitting hard a majority of small and medium traders. It is also learnt that production of grey fabrics has also gone down by 50% because of decline in demand of saris and dress material following the imposition of GST.

The traders had earlier said the government is not supportive and was not paying heed to their “legitimate” demands. Hence they had observed “Dark Diwali” – refusing to decorate and illuminate market as they do every year to mark the festival of light.

Textile traders said the decisions by GST Council in its last meeting have failed to boost the declining market as most of their demands were neglected.

“Except for the relief in e-way bill and abolition of Reserve Charge Mechanism (RCM) till March 2018, the GST Council ignored all our demands”, traders said.

They also said they won’t be able to take benefits of the composition scheme as the turnover for the scheme has been raised from Rs. 75 lakh to Rs. 1 crore per annum.

Morover, the GST Council’s relief to taxpayers by filing quarterly return provided the turnover is less than 1.5 cr.

“A turnover of 1.5 cr in textiles is very common. Even a small trader runs business having a turnover which is more than this. The turnover limit must be Rs. 5 cr”, they said.

Textile traders also said that reduction of GST rate form 18% to 12% on yarn will only help manufacturers, and not the traders.

"We never demanded reduction in GST of 18% on yarn to 12%. The decision is taken to benefit spinners and yarn manufacturers. Our demand for Input Tax Credit (ITC) refund is not accepted”, Ashok Jirawala, President of Federation of Gujarat Weavers' Association (FOGWA), said.

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