The Union Finance Minister should call for an urgent meeting of the GST Council, which must reverse its decision to raise the GST rate on several textile and apparel products to 12% from January 1, Amit Mitra, Principal Chief Adviser to the Chief Minister of West Bengal, urged on Friday.
Citing a study conducted by a national level body of the textile and clothing sector, Dr. Mitra told reporters at a virtual press meet that it was estimated that one lakh small-scale units would be forced to close down and almost 15 lakh people rendered jobless if the GST rate increases took effect.
The apparel textile market at a retail level was said to be worth ₹5.4 lakh crore. Moving to 12 % GST for several products meant manufacturers would need more working capital.
When funds were not available, the units would either shut down or shift to the informal sector. It could also lead to higher imports. And, if the prices rose because of higher GST, consumer demand would drop.
Even the textile units in Surat and Ludhiana, which were major clusters of manmade fibre, had demanded reversal of the decision.
Given the inflationary pressure, high unemployment, rise in cotton and apparel prices and the pandemic, there ought to be status quo on the GST rates for the textiles and clothing sector, he added.
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