'Proposed hike in GST may up prices of cloth, garments'

 








The Punjab Pradesh Beopar Mandal (PPBM) has stated that the proposed hike in the GST rates will up the prices of cloth, garment and shoes from January 1, next year. They have demanded a rollback of the proposed hike in the GST.

Piara Lal Seth, president of the PPBM, said the GST rate on garments and footwear costing less than Rs1,000 per piece so far, would be hiked from 5 to 12%. “The move could only fuel inflation and traders are likely to see this change in cost overruns and low demand in the domestic and export markets,” he said.

The MSME sector (micro, small and medium enterprises) of the textile industry, which is struggling with inadequate working capital, will be hardest hit by this blow. “We should not forget that the MSME sector provides most of the employment in the country after agriculture,” he observed.

Sameer Jain, general secretary, PPBM, said factories and shops with stocks of cloth, garment and shoes will have to be sold at 12 per cent GST rate from January. So, they will have to increase prices of these commodities by 7% as they had taken its input credit by 5 per cent. Its entire burden will be passed on to the customers. The Central Government had collected a record GST collection of Rs 1.31 lakh crore in October and it is expected to increase in the coming months.

The Shawl Club of India has also expressed concern over the increase in the GST of these articles, stating that shawl is a seasonal commodity and most of its sales and production are in hilly and cold areas like Jammu and Kashmir. The shawl is a labour-intensive product and the increase in the GST will affect both the domestic and export markets.


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