Textile Workers Are Still Feeling The Heat, But The Industry Is Back To Normal After GST Roll Out Aleem Faizee

After initially opposing and resorting to violent protests in Gujarat, Tamil Nadu and other clusters in the country, textile traders have at last given up and are now rushing for GST registration through online and other means.

A week ago, the most awkward situation was witnessed in Surat where the textile traders not only dissolved the GST Sangharsh Samiti, but also kicked out the Samiti’s founder president for misleading the industry and taking the stir against GST in the wrong direction. Fellow members alleged that Tarachand Kasot wasted 19 days of Surat Textile Industry for something which was “almost impossible to achieve”.

The textile traders in Surat continued their stir for 19 long days, despite being baton charged and facing arrest by the police, to protest imposition of GST which they feared will destroy the livelihood of over six million families across India.They called off their stir after failing to get government’s attention, but not before inflicting a massive loss of more than 2,800 crore rupees in Surat alone, according to a rough estimate.

“After protesting for about three weeks, textile traders realised that they do not have any option but to go along with what the government has decided. It is hence they called off their agitation and are now rushing for GST registration”,  Ajoy Bhattachariya, former president of South Gujarat Chamber of Commerce, and himself a textile trader, said while talking to Textile Value Chain.

“Routine operation in the city is also coming down to normal though it will take months before the industry comes running to its fullest potential”, he added.

Situation in Bhiwandi and Malegaon however is totally different. Powerloom units in the two leading textile clusters producing the major share of grey fabrics and known for their 24x7 culture are still struggling for normalcy.

“Majority of powerloom units in Malegaon are running for just 3 to 4 days a week since the roll-out of GST”, Tarique Mahmood of Ali’s Fabrics said.

“We have all done with GST registration and other necessary requirements. But the problem is that grey cloth merchants and traders in Pali, Balotra and other centers have not yet done their registration hence they are refusing to buy our produce”, he said.

“Under such a situation it will be suicidal if we run textile units for the entire week”, he added.

Malegaon alone has about 2.5 lakh powerlooms and produces about 2 crore meters of grey fabrics every day. The city has just three processing units and hence most of the grey fabrics are sent for processing outside.

The case with the powerloom weavers in Bhiwandi is also more or less same. But the important factor in the two cities which came out very strongly post GST era is that there was no unrest or anger against the government’s decision to impose the levy. Majority of the weavers in the two cities had made up their mind from the day one to adjust their business as per the new situation and were ready to face the challenges whatsoever.

It is however the labourers here who are the worst sufferers due to slowdown in the post GST era. Going by the record, wages of labors who are running 12 looms is about Rs 500 per day and they used to carry home some 2,800 to 3,000 rupees in a week. They are suffering because powerloom units are running just for 3-4 days a week.

“A labor was paid about 3000 rupees every week before GST was imposed and the powerloom units were running all weekdays. Now he is left with a meager 1000 to 1500 or a maximum of 2000 rupees in a week. It has become difficult for them to survive on this sum”, Abdur Razzaq, who is working as a supervisor-cum-technician, said.

“Some had postponed marriages and other family functions. Still, they had to borrow from others so that they can meet regular expenses, especially of the school going children as the academic year has just begun and money is needed to buy textbooks and notebooks”, he added.

Meanwhile, the Goods and Services Tax (GST) Council in its 20thmeeting on Saturday August 05, 2017 slashed the GST rate on textile job work from the existing 18% to 05%.

“One big issue was tax rate for job work in textiles sector. A consensus was evolved that the GST rate for job work throughout the textile chain and even for textile-related items such as apparels, shawls, carpets will be 5 per cent),” finance minister Arun Jaitley told reporters after the meeting.

Earlier, the GST for job works related to textile yarns, other than man-made fibers and textile fabrics, was 05%, while for manmade fibers, it was 18%.

However, the decision has failed to impress the industry as there is a demand to completely abolish the GST on job work.  The industry is also upset because the GST Council did not pay heed to their demand of uniform rate on entire textile chain.

 

“The industry demand was to completely abolish GST on job work and bring uniform GST rate for entire chain. The GST Council’s decision to reduce GST rate on job work will not have any significant and healing impact on the challenges the industry is facing after the imposition of the levy”, Abdullaj Makki of Malegaon Industries & Manufacturers Association (MIMA) said.

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