Anxiety among garment and textile sector businessmen is increasing by the day, as January 1, 2022 – the date when GST on some of their raw materials and products will be hiked to 12% from 5% – is drawing near. Business associations have written a letter to Union finance minister Nirmala Sitharaman, urging her to defer the implementation of the new rates of GST.

Harish Kairpal, president of Ludhiana MSME association, said, “The GST council has decided to hike the tax to 12% on woven fabrics of silk or silk waste, woven fabrics of wool or of animal hair, woven fabrics of cotton, woven fabrics of flax, several types of textile garments, all types of woven and knitted fabrics and knitted garments. As of now, 5% GST is applicable on all these items, but from January 1, 2022, the GST will be hiked by 7%. It will be a huge burden on the textile and garment industry. It will become impossible for micro, small and medium enterprises to do business. Therefore, we have sent a letter to Union finance minister Nirmala Sitharaman requesting her intervention in the matter and deferment of this decision by at least one year.”

According to Narinder Mittal, general secretary of Ludhiana Business Forums, “If the GST on textile and garment products and raw materials is hiked from 5% to 12%, it will not only make the garment costlier, but will also lead to another problem for us as we will have to infuse more capital in our business. In the present circumstances, when there is huge fund shortage and recession as well, this decision of increasing GST can prove fatal for small industries.”

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