Most textile clusters have started getting back to production after the introduction of the Goods and Services Tax (GST), as they brace for the festival season.
The movement of yarn has picked up in the last three or four days, especially cotton yarn. With Deepavali nearing, industries need to start production and stock goods from now for the peak season sales, said J. Thulasidharan, chairman of Confederation of Indian Textile Industry.
Following the implementation of the GST, production was stopped in some of the textile clusters in the country as the weavers and traders sought withdrawal of the new tax system on textile goods.
Just about 10% of the powerlooms in Coimbatore region are operating after GST as traders from the northern States have not yet started their purchase.
They all need to move into GST and start procurement, said one of the powerloom unit owners at Somanur, near Coimbatore.
With regard to the manmade fibre (MMF), synthetic yarn prices are slightly up because of 18% GST on MMF fibre and yarn and 5 % duty on fabric.
Weavers were asking for a lower price of yarn — one of the reasons behind the demand of a cut in duty on MMF yarn to 12 %.