BENGALURU: The Goods and Service Tax has dented another hole in the handloom sector that is still struggling to keep up with the big players in the market. The 5 per cent GST on cotton yarn has proved to be a nightmare for weavers, says B Syama Sundari, convenor of All India Federation of Handloom Organisations. Most weavers in Andhra and Telangana regions work with cotton that is bought from the National Handloom Development Corporation (NHDC). “The tax on cotton has spiked the price of handloom products,” she says lamenting on the state of the niche market. Nearly 44 lakh families of weavers across the country are affected, says Syama. “It is not a small number. Our contribution to the GDP has never gone below 11 per cent,” she says.
The NHDC has refused to supply cotton yarn to handloom socities that do not have a registered GST number. J K Suresh, member of Loka Vidya Vedike observed the handloom industry to be the worst-hit sector by GST.M M Kulkarni, member of a handloom cooperative society that supports 600 families of weavers in Gajendragad says the cost of thread has increased. A gunny bag of 4.5 kg thread used to cost him `300 to `600, but with GST, these rates have now spiked by`20 to `50 more per kg. He adds that he used to spend `450 on a traditional sari of North Karnataka and sell it for `500 or `550. “After GST, I spend about `600 a sari and am forced to sell it for about `700.” Kulkarni is a registered weaver and has a GST number.
“When I go to buy thread from NHDC, they say the GST number is not working. I check with my auditor and go back to NHDC. Instead of weaving, I have been running around to fix the GST number for over a month,” he adds.Cotton yarn is sold as bundles (each bundle weighs 4.5 kg). The cost of the yarn differs based on its kind. For example, the “80s count” yarn used in sarees costs `2000/bundle. After the implementation of GST, this rate has spiked by `100. Syama says, “It may not seem like much. Handlooms is a highly price sensitive market.”