In a letter to Union Textiles Minister Piyush Goyal, Industries Minister KTR has appealed to withdraw the plans of revising GST from 5 per cent to 12 per cent on textiles and Handlooms sector from January 1, 2022.

For the past two years, the textiles, especially handlooms sector, was going through a tough phase due to Covid pandemic impact. At this juncture, revising the GST from the current 5 per cent to 12 per cent would serve as a deathblow to the industry, he said in the letter.

After agriculture sector, textiles and handlooms sector provide highest employment in the country. Considering the current scenario, the need of the hour was to extend additional advantages and incentives to the sector, he said.

He also stated that the decision to increase GST on textiles and handlooms is not wise.

Never in the country’s history were taxes levied on handlooms and the Centre move to levy 5 per cent tax was strongly opposed by the textiles and handlooms sector across the country, he reminded.

“The current decision to impose additional seven per cent GST on the handlooms would leave the sector crippled. Telangana produces world-class handlooms and weavers are worried a lot due to the Centre’s decision to increase GST,” said Minister KTR

Minister KTR also stated that almost 80% of the units were in the MSME segment. Fixing the rate at 12% for fabrics and garments and increasing the rate to 12% for fabrics would hit the power loom and handloom weavers.

Adding to this, it will only lead to higher prices for the common people, he said.

Increased GST on handlooms would be a mistake because one huge advantage that India has during times when people all over the world are getting conscious of handmade, natural fibers and eco-friendly processes, is that it already has millions of people who are skilled in these processes. It’s time when we should be investing in them and target an international market growth for handloom and natural fiber. Instead, we are trying to drive them out of existence, said Minister KTR.

Minister KTR suggested to roll back the increase in GST on textile products, or at least keeping handlooms at the earlier GST rate of 5%.