Notwithstanding Gujarat government’s assurances, agitating textile traders of the state have hardened their stand against the implementation of Goods and Services Tax (GST) and decided to go on an indefinite strike. Textile merchants from across the state have decided to shut shops till the state and central governments accede to their demands of deferring GST by two years. The government has imposed 5% GST on fabrics. According to traders of Maskati Cloth Market Association, New Cloth Market and Panchkuva Cloth Market in Ahmedabad, the 5% GST imposed on fabrics is not acceptable to anyone in the textile business. Textile traders had a four-hour-long meeting with Gujarat deputy chief minister and member of GST Council Nitin Patel to discuss the contentious issue on Monday. The state government had assured the traders that the matter would be raised during the next meeting of the Council on August 3. However, traders insisted that the issue be taken up at an earlier date.
“We met Nitin Patel and other officials of the state government on Monday. The deputy CM promised us that the GST rate on textile industry would be taken up at the next council meeting. But we want concrete action so we have decided to go for indefinite strike,” said Gaurang Bhagat, president of Maskati Cloth Market Association.
The trade associations during the meeting with the state government argued that all segments of the textiles industry were tax-free for the past 60 years, and there was no duty on yarn.
Under the GST structure, there would be problems in implementing the credit system, and these could be avoided by one-time tax collection on yarn.
After meeting with the government, the association met the traders to decide on the future strategy. In the meeting it was decided that Ahmedabad-based traders will go on indefinite strike from Tuesday. Bhagat claimed that apart from Ahmedabad, all other textile markets of Gujarat will join the strike call.
According to textile traders’ associations of the state, before implementation of GST, government should take traders into confidence. They are also demanding complete removal of GST on textiles or give two years time for preparation for the implementation.
Tarachand Kasat, convener of Textile Bachao Sangharsh Samiti in Surat said, “Without taking us into confidence, the government has implemented GST on the sector. We need time of two years to understand and prepare us for the new tax structure. Most of us are small traders and not fully aware about GST. Our strike will continue till the government does not respond properly to our demand.”
Surat has 60% share of the country’s synthetic cloth production, and the city has more than 7,20,000 looms.
As part of the protest, traders are planing to organise mass rally at Ahmedabad this week.