Centre deferred GST hike on textiles fearing defeat in upcoming polls: Cong

Reacting to the Centre's announcement to defer the earlier decision to increase GST on textiles from 5 per cent to 12 per cent, All India Congress Committee (AICC) Spokesperson Mohan Prakash on Saturday said that BJP took this decision out of fear of losing the upcoming Assembly elections in five states.

"Due to the opposition of the Congress Party and the Congress-ruled states and fearing an impact on the elections in five states, this increase has now been postponed till February 28 in a hurry. This date may get extended by 1 month due to elections," he said.

"Have you ever thought about what our government is giving us on the new year for our happiness and prosperity? What are Modi Ji and his government wishing for us? Like for the last seven years, this year also the gift given to the people of the country by the Modi government is - 'Gift of Mahangai- Price Rise and Inflation'," he said while addressing a press conference on Saturday in Gandhi Bhavan in Telangana.

"Finished goods such as apparel and textiles are set to get more expensive from January 1, 2022, with the Union government increasing the GST on such items from 5 per cent to 12 per cent"," he added.

"The GST rate on apparel costing up to Rs 1,000 per piece has been hiked from 5 per cent to 12 per cent. Also affected by the same hike are rates of textiles, including woven fabrics, synthetic yarn, blankets, tents, and accessories such as tablecloths or serviettes," he stated.

"It may be worth noting that the decision was not reversed- it was postponed. This tax will be imposed again on the people as soon as the elections are completed," he said. "Over 15 lakh jobs in main and ancillary units would be lost because of raised GST and therefore unviable increased cost of production. Because the unorganized sector accounts for over 80 per cent of fabric production in the country, raising the GST on fabrics to 12 per cent will hurt power loom and handloom weavers' business and employment," he further said.

"Due to extraordinary price increases in raw materials like yarn, packing materials, and freight, the market will likely experience a 15-20 per cent price increase in clothing. Individuals who purchase clothing for less than Rs 1,000 will be the most affected. According to the garment industry, 85 per cent of the clothes sold are priced below Rs 1000," he said.

Earlier on Friday, Union Finance Minister Nirmala Sitharaman Friday said the Goods and Services Tax (GST) Council has decided to defer the decision to increase tax on textiles from 5 per cent to 12 per cent.

While, in a meeting held on September 17 in Lucknow, the GST Council had decided to hike GST on textiles and footwear items from 5 per cent to 12 per cent effective from January 1, 2022.

( With inputs from ANI )

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