A seminar was held in Surat on Monday on 'impact and implementation of GST in textiles' organized by Southern Gujarat Chamber of Commerce and Industry (SGCCI), entrepreneurs opposed the representation made by the SGCCI and the Synthetic and Rayon Textile Export Promotion Council (SRTEPC) for keeping uniform GST rates for man-made fabric (MMF) and cotton textiles.

With Central Government fixing tax rates at 18 percent on yarn and 5 percent on fabrics will destabilize the textile sector and will lead to heavy increase in yarn prices and also create confusion among traders in getting input tax credit.

Former president of SGCCI Amarnath Dora said that at present, the weavers have to pay 0.75 percent tax on yarn per kilogram. After GST is implemented, they will have to pay Rs2.70 to Rs5 per kilogram tax. This will result in increase in yarn prices from Rs5 per kilogram to Rs25 per kilogram.

Surat Textile Exporters Association president Rakesh Choudhary stated that GST tax slabs in textile sector were not appropriate and that small weavers and traders will be hit hard.

For taking input tax credit, the traders will have to get advance receipt of goods, invoice date and time and place of delivery.

Surat's textile sector is unorganized and most of the textile manufacturers do not have advance receipt of goods. In most of the cases, the manufacturers get advance payment before the goods are actually supplied. However, the traders will have to accumulate input credit.