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Taxing Trouble for Textile Industry

Published: 03rd September 2014 06:00 AM  |   Last Updated: 03rd September 2014 12:12 AM   |  A+A-

textile

KOCHI: With the new rule in place in sales tax, the arrival of garments into  the state has taken a big hit. This has impacted the sales of items this  Onam season too. The textile industry was already in troubled waters owing to the introduction of Turnover Tax in the last State Budget.

The negative sentiment witnessed from the customers also took the steam out of the industry this festival season. Industry sources say that the wholesale selling is down by a minimum of 10 per cent and for the retail sectors the sales is down by atleast 20-25 per cent. Making matters worse the traders do not expect a revival in the market in the near future.

It is estimated that during Onam season, sales to the tune of Rs 10 cr happens per day in textile sector in and around the city.

“Unlike the previous period, this time a visible rush is not happening  though this is festival season. People are not pushing their shopping plans till Onam it seems. In the coming days there may be a boost in sales but it will not be enough to rescue the Onam market. Rain and the sorry state of roads in the city are the major factors which keep the customers away from shops,” said M A Mohammed, managing director, Oberon Group.

He points out that compared to last year, the sales are going to be flat this time If not down.

“The contribution of Onam season to the overall sales has depreciated over the past few years. The textile industry is in soup now owing to many  reasons including unscientific taxation. Another dampener this time has been the unexpected hartal on Tuesday. There may be a slight push in sales when the Onam holiday starts,” said E P George, managing director, Novelty Textiles and former chairman, Kerala Chamber.

His only hope this time relies on after-Onam sales in the textile industry.

According to Shrenik J Shah, a garments dealer at Market Road in Kochi, continuous rain has decreased the sales this time and it seems rainfall may continue in the days to come which are not at all good for the sector.

“The wholesale business is now down by 10 per cent and the impact is more on retailers. It seems people will not come in large numbers in the coming four days to rescue the industry,” he said.



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