Telengana calls for Govt to reconsider GST rise on textiles, handlooms

HYDERABAD: The Telangana government has asked the Centre to reconsider its decision to raise the GST on the textile and handloom industries.

Telangana's Industry Minister K.T. Rama Rao has written to Union Finance Minister Nirmala Sitharaman, urging her not to advance this idea at the GST Council meeting on Friday, which she would chair.

He stated that the industry and weaver community have staged several protests demanding that the Union government waive the 5 percent GST on handloom products and raw materials. Instead, the Centre plans to raise it to 12 percent on January 1, 2022, effectively killing the industry and displacing lakhs of people.

The textile and handloom industries employ the second-largest number of people in our country. This sector is already feeling the effects of Covid-19, and the Union government has done little to help it. Given the current situation, K.T. Rama Rao believes the Centre should provide extra benefits and incentives to the sector.

He went on to say that the GST rise will affect around 80-85 percent of handloom and textile industry. Raw ingredients, yarn, chemicals, packaging material, and transportation costs have all increased significantly since Covid. In addition to these expenses, the increase in GST will boost production costs by 15 percent to 20 percent.

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