GST impact on clothes: The Goods and Services Tax or GST which was implemented in India on July 1 has completed two weeks. Almost all the sectors have been affected by it, with some items getting expensive while others have become cheaper. Just like the other goods, GST had a direct effect on the prices of clothes as well. According to a report by The Indian Express, the president of Surat textile traders’ body, which has been protesting the new tax regime for around one month revealed that if the government doesn’t withdraw 5 per cent tax that has been imposed on the textile industry, saris and dress materials that were available for just Rs 70 will now end up costing Rs 200. If these numbers get actually proven right, the cost of saris can actually go up by three times.
Due to the protests, there has been a very little activity in the city for last 20 days and even the owners of power loom units in the city had joined the textile traders protest, demanding the Centre withdraw GST (Goods and Services Tax) on the industry. “The Surat textile industry caters to rural and poor population of India by supplying cheaper saris — some costing as less as Rs 70. Now, with the imposition of GST, the cost of the saris will go up. The textile industry of Surat does not only manufacture cheapest saris, but also luxurious ones, costing around Rs 7,000. There is no major market of the cheapest and the costliest saris in India, but those priced between Rs 200 and Rs 250 are high in demand in all states. We expect that after GST, the prices of these saris will rise to Rs 350 to Rs 400. Besides GST on yarns, manufacturing and trading are taxed and the final product reaching the customers will cost more,” Federation of Surat Textile Traders Association (FOSTTA) president Manoj Agrawal was quoted saying in the report.
Before the implementation of GST, the textile industry was exempted from tax. Surat mills alone account for 40% of country’s total synthetic fabric production and saris made from man-made fibres are cheaper and bought by the poor. However, after GST, these prices are likely to go up significantly taking a toll on your pocket.