GST impact: 20 lakh workers lose job in handmade carpet industry

Contrary to Prime Minister Narendra Modi's definition of GST as "Growing Stronger Together", the good and simple tax is proving a major job 'snatcher'. According to Carpet Export Promotion Council (CEPC), the export of handmade carpets and other floor coverings has been hit badly due to the imposition of 18 per cent GST on job works and 12 per cent GST on sale/purchase on these items after implementation of Goods and Service Tax (GST) from July 1.

According to Carpet Export Promotion Council (CEPC) chairman Mahavir Sharma, almost 5,000 units, which have been inoperative and are on the verge of closure.

"As per estimates, the exports of around Rs 1,000 crore have suffered on account of closure of these production units. No new orders are being executed and weaving has almost come to a complete closure for new orders. The old orders and stock are also not moving out of fear of imposition of tax, not getting increased price from buyers due to old contracts and worry about losing money," the CEPC chairman said told Millennium Post.

"It's the fallout of GST implementation that Indian carpet industry is losing its competitiveness and sheen in the global market. Other countries like China and Turkey are set to benefit and fill the space left by the Indian handmade carpets," Sharma said, adding the carpet body is waiting for GST Council meeting which is scheduled to happen on August 5.

"We are hopeful that government would waive off the GST imposed on carpet industry during the scheduled GST Council meeting. If it happens, the 20 lakh jobless weavers would be saved from getting homeless, but the losses incurred due to the closure of units have cost the country to the tune of Rs 1000 crore and loss of foreign exchanges," Sharma said.

Most of the weavers belong to far flung rural areas of Uttar Pradesh, Rajasthan, Jammu & Kashmir, Haryana, etc. The body is holding a protest rally in UP's Bhadohi on Wednesday to press for their demand to roll back the GST slab on carpet industry.

The GST on carpet has affected the livelihood of around 20 lakh of workers and their families in the carpet producing belts of UP such as Bhadohi, Mirzapur, Varanasi, Ghosia, Aurai, Agra, Sonbhadra, Saharanpur, Sahajanpur, Jaunpur, etc.