SURAT: A likely move by central government to review present rates of Goods and Services Tax (GST) in textile sector has left powerloom weavers worried in the country’s largest man-made fabric (MMF) sector in Surat. The weavers fear rate review may adversely affect the industry. Federation of Indian Art Silk Weaving Industry (FIASWI) on behalf of other important associations representing powerloom industry has written to Union finance minister Nirmala Sitharaman saying that any change in the current GST rate structure may adversely affect fabric manufacturers while it may benefit yarn spinning sector.
At present, GST on yarn is 12% and it is 5% on trading and powerloom. The government incurred loss of over Rs3,500 crore after it reviewed GST rate on yarns from 18% to 12%, while MMF fabrics continued to be taxed at GST rate of 5%, with no refund of input tax credit (ITC).