Bengaluru : Karnataka Chief Minister Basavaraj Bommai Friday requested Union Finance Minister Nirmala Sitharaman to reduce the GST rate on textile and readymade products to 5 per cent to help small businesses and consumers in difficult times of Covid.
In a letter to Sitharaman, he said there is fear in the trade regarding the proposal of increasing the rate of textile and garments to 12 per cent irrespective of sale price.
“The proposal being floated in the GST Council is completely opposite as it is slated to increase the GST rate to 12 per cent on all the goods under textile and readymade garments,” Bommai said.
This increase in rate will not only increase the burden on end customers but also jeopardise the fact of small businesses who are already struggling with high rental costs, lower and slow realisation, he said.
The sector generates one of the highest employment
to semi-skilled labour especially for women which leads to their empowerment and increase in overall household income of the family, Bommai said.
Considering this, the increase in rate is likely to cause irreparable damage to the industry and job losses, he said.
Bommai said the GST rate for textile and readymade garment is currently under two slabs of five per cent and 12 per cent, which creates an anomaly in taxes and causes a lot of tax outflow in the hands of retailers.
“Therefore, we request you to keep a single rate of 5 per cent on all textile and readymade garment which would enhance ease of doing business for the trade,” he reasoned.
Bommai said there is a huge opportunity to boost textile trade in India by reducing the rate on all such goods to 5 per cent without any cap on value which is possible only if the centre extends wholehearted support to the textile sector.
The state government has extensively been promoting the Make-in-India initiative and it can be increased by leaps and bounds with the support of the textile sector, he said.
Bommai said the sector has contributed immensely during covid in manufacturing and distribution of PPE kits, masks and other essentials.
