HYDERABAD: IT, Industries and Handlooms Minister KT Rama Rao has shot off a letter to Union Textiles Minister Piyush Goyal, requesting the Centre to withdraw the plans to revise GST on textiles and handlooms from the existing five per cent to 12 per cent with effect from January 1, 2022.
Pointing out that the textile and handloom sector has been going through a rough patch for the past two years, owing to the pandemic, Rama Rao said in his letter to the Union Minister that at this juncture, revising the GST from five to 12 per cent would deliver a deathblow to the industry.
“After agriculture industry, textile and handloom sector generates the highest number of employment opportunities in the country. Considering the current scenario, the need of the hour is to extend additional advantages and incentives to the sector. Never in the country’s history taxes were levied on handlooms, and the Centre’s move to levy five per cent tax itself was strongly opposed by those working in the sector across the country,” he reminded.
“The current decision to impose an additional seven per cent GST on handlooms would leave the sector crippled. Telangana produces world-class handloom products, and weavers are now a worried lot due to the Centre’s decision to increase GST,” the Minister further pointed out.
As a result, Rama Rao mentioned, the new generation will move away from the sector due to low profitability. Though the 2011 census said that about 43.3 lakh households were involved in the handloom sector, the latest figures show that only 30.44 lakh households are in the sector now. About 25 per cent of families have already left the industry and if the trend continues, the sector in the country is likely to disappear in the next few years.
“About 67 per cent of households working in the handloom sector rake in less than Rs 5,000 per month, while another 26 per cent earn an income of less than Rs 10,000. This means that a total of 93 per cent of households working in the sector don’t make more than Rs 10,000 per month,” Rama Rao added in the letter.