HYDERABAD: Textile shops across Hyderabad remained shut on Tuesday, expressing their displeasure against the five per cent Goods and Service Tax (GST) to be levied on the sector from July 1. The pan India strike saw all textile shops across 31 districts in Telangana shutting shop.
The Old City’s Madina Market bore a deserted look on Tuesday with over 500 shops staying shut. Five association in Madina market took part in the strike.
“Our greatest problem is on how to get adjusted to the new system,” said Purushotam Gupta, president, Hyderabad Wholesale Cloth Merchant Association. “As the cost of entry into this business is low, you will find a lot of women and families from the lowest income group working in the sector,” he added.
If GST is brought in its current form, over 50 per cent of the traders in the state will overnight be unable to trade, warn textile associations. “As they are not GST compliant, they will not be able to do trade. This will end up in a majority of them losing their livelihood,” said Gupta.
An un-prepared sector
The textile traders say the sector is not against the taxation but is merely unprepared for the GST regime.
GST for the textile sector was announced only in the first week of June. Traders allege that GST on textiles would only benefit big manufacturers and has been levied on the sector to stifle competition from the unorganised sector.
“None of the traders in TS districts have a computer, none of them have been trained in GST-network either. Officials did conduct training camps on how to file returns using the GSTN software but only for traders who have a computer. The rest were ignored,” said Prakash. There exists power shortages and poor network connectivity in many Telanagana districts. Trying to become GST compliant would require additional investments which many from this unorganised sector will be unable to afford, he added.
Sector will be more organised
Hyderabad-based women entrepreneurs are upbeat about the sector moving into the GST regime. Experts related to the Micro, Small and Medium Enterprises (MSME) sector say with input credit system being brought in by GST. The sector will become more organised and be able to compete in larger markets, eventually benefitting the large number of women working in the sector.