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GST Impact: 22%-25% Price Hike in Textiles During Durga Puja

The usual Durga Puja sales spree may take a hit this year as textile prices are expected to shoot up by nearly 22%-25% in West Bengal, as the new GST regime brings a 5% tax on fabrics.

Sujit Nath | News18.com

Updated:July 3, 2017, 1:01 PM IST
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GST Impact: 22%-25% Price Hike in Textiles During Durga Puja
The usual Durga Puja sales spree may take a hit this year as textile prices are expected to shoot up by nearly 22%-25% in West Bengal. (Photo Credit: Getty Images)

Kolkata: The usual Durga Puja sales spree may take a hit this year as textile prices are expected to shoot up by nearly 22%-25% in West Bengal, as the new GST regime brings a 5% tax on fabrics. The GST council has imposed a 5% tax on yarn, fabric cotton and apparels up to Rs 1,000. In case of ready made garments it will be 12%, while hand-made yarn has been taxed at 18%.

Several traditional, non-mechanised, saree manufacturing units in places like Shantipur, Fulia, Murshidabad and Birbhum are fearful of the new tax system hitting their businesses hard. The manufacturing units claim that wholesale traders will bargain to keep their profit margins high ahead of the Puja season.

“Most of workers in saree industries are uneducated. Even those who are running these units are also unaccustomed to the tax system. We are confused on how to run our business,” Bhawani Mallik, a whole sale Bengali saree traders in Fulia, Nadia district said.

Speaking to News18, Arun Bhuwalka, president of Chamber of Textile Trade and Industry said, “Puja is in September this time – it’s early. We have less time to understand the revised prices or how much burden we would have to bear.”

“We have never paid taxes since Independence but now we have no other option but to increase prices. Our production cost will increase by 10%-12% and this is ultimately going to affect the buyers because the prices are going to increase by 22%-25%,” he said.

According to Bhuwalka, there are more than 5 lakh textile traders in Bengal, of which nearly 52,000 are in Kolkata alone. “The textile market is big in Bengal. During Puja, sales increase by almost 10%-15%. One can imagine how the tax slabs are going to hit the traders hard,” he said, while adding that not only Bengal the same problem is also being faced in Gujarat, Maharashtra and in Tamil Nadu.

Traders’ body are complaining that despite repeated letters – to Union Finance Minister Arun Jaitley, Minister of State for Finance Santosh Gangwar and Textile minister Smriti Irani – their pleas went in deaf ears.

As per Associated Chambers of Commerce and Industry of India (ASSOCHAM) – in last few years, the Durga Puja market grew at the rate of approximately 35% per annum. This year though, it may go down due to the unified tax system.

“Next month, textile associations across India are going to sit for a joint meeting in the national capital to decide the next course of action,” Bhuwalka said.​

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| Edited by: Swati Sharma
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