Sambalpur: Imposition of goods and services tax (GST) on handloom textiles—a largely subsidised sector by the state government— has doomed the fledgling industry in the state. Its impact has already started showing with major retailers in the state recording a decline in sales. GST on Sambalpuri clothes will push our products off shelves, especially when we are struggling for existence, Ramkrushna Meher, a expert in handloom design, production and marketing from Bargarh, said.
The sales of Sambalpuri handloom textiles in Bargarh dwindled by 70 per cent immediately after a five per cent GST was levied on them. Although the sales improved a bit in August, the subsequent months have seen a 20 per cent dip in revenues. The festive months did not help make up for the downtrend.
Ramakant Meher, a prominent Sambalpuri textile shop owner at Sambalpur, echoed his reaction, saying his business has been adversely affected by GST as the sales have gone down by about 20 per cent. He said customers are not ready to accept the price rise because of the GST load.
Anand Meher, another trader at Sambalpur, said that a fall of 20 per cent in sales will work out to a loss of Rs 10 lakhs which will upset his plans and prospects. Sharing his concern over GST, he said he has to struggle hard to stay afloat in the competitive market these days.
‘Sakshi Handloom’ is a well known showroom of Sambalpuri textiles at Sambalpur. Its owner Pradip Sahri is not just a trader but a path breaker in this field. He introduced computerised design in the business. Sahri said the five per cent GST does not gel as the government offered seasonal subsidy of 20 per cent and then 10 per cent on handloom textiles to promote their sales. “What is the use of offering 20 per cent subsidy on one hand and imposing 5 per cent GST on the other hand?” he asked.
Shedding light on another aspect, he said the machines used for weaving handloom textiles are tax-free items but the produced textiles attract five per cent GST. It is a big confusion created by the government, he aded.
The sales structure under GST is also peculiar in case of readymade garments made out of Sambalpuri textiles. As per the provisions under the Act, there is a five per cent GST up to sale of 1,000 pieces of such garments per annum while the rate goes up to 12 per cent when the sales go beyond 1,000 pieces per annum.
As per a gross estimate, the total turnover of Sambalpuri textiles per annum is about Rs 300 crores. Balijuri in Bargarh district is the largest market of Sambalpuri textiles in India. It clocks a per day sale of about Rs 1 crore. It has weekly markets on Saturdays that attract thousands of weavers, traders, vendors, agents (middleman) and retailers. Its annual turnover is estimated to be over Rs 50 crores.
Similarly ‘ Sambalpuri Bastralaya’ based at Bargarh is a cooperative giant in the field of Sambalpuri handloom textiles whose sales are estimated to be around Rs 50 crores per annum. Every town in the region has more than one shop dealing in Sambalpuri handloom textiles. Sambalput city alone does a sales turnover of Rs 20 crores.
The market has taken a 20 per cent hit because of the GST which could work out to a loss of about Rs 60 crores per annum. The tax has ruined the lives of thousands of weaver families in the state.
There is a provision for Input Tax Credit (ITC) and Output Tax Credit (OTC) providing tax discounts to traders subject to double taxation under GST rules. However, the million dollar question is whether our weavers and traders competent and computer friendly to avail the said advantages. PNN
