CAIT Urges Sitharaman To Withdraw 12% GST Tax Rate On Textiles

According to the trade body, a hike will load an extra burden of a 7 percent tax rate on general consumers and will also hit the traders by blocking their capital with the department in the shape of refunds.

In a communication sent to Finance Minister Nirmala Sitharaman on Thursday, the Confederation of All India Traders (CAIT) has urged the withdrawal of the proposed 12 per cent GST tax rate on textile which was suspended by the GST Council on December 31 last year for implementation till February. 

The National President of CAIT, B.C.Bhartia and Secretary-General, Praveen Khandelwal said that the proposed hike which is in the abeyance stage should be withdrawn in the larger interest of consumers of the country. 

According to the trade body, a hike will load an extra burden of a 7 per cent tax rate on general consumers and will also hit the traders by blocking their capital with the department in the shape of refunds.

There was no tax on textile and fabrics for a number of years. Bringing the textile Industry back under the tax net itself was a big blow to the entire textile industry, the trade body added. 

According to the CAIT, “The increase in GST rates on textile will not only add to the financial burden on end-users  but will also affect small businessmen badly and will encourage evasion of tax and various malpractices being undertaken by habitual offenders of the law.”

Further, the goods which are lying in stock of the businessmen and sold on MRP the additional burden of 7 per cent will be on the businessmen, it said. 

The trade body believes that an increase in tax rate will not only hamper the domestic trade it will affect the exports adversely. Already the textile industry is not at a competent status with Countries like Vietnam, Indonesia, Bangladesh and China.