Victory for Bengal: GST hike on textiles from 5% to 12% deferred

Kolkata: With Chief Minister Mamata Banerjee raising her voice before anyone else did, the proposed hike in the GST rate on textiles from 5 percent to 12 percent has been deferred; the GST Council decided in its meeting on Friday with Union Finance minister Nirmala Sitharaman announcing the decision.

Several states, led by Bengal, had flagged the issue and sought a deferment of the proposed hike stating that it would adversely affect the GST collection as a whole.

Since the proposal was made to increase the GST on several textile goods, Banerjee – who is also the state's Finance minister — had protested against it saying that it is not only anti-people but will also adversely impact the country's textile sector.

Minister of State for Finance Chandrima Bhattacharya raised the issue in both the subsequent meetings of the GST Council maintaining that it would lead to around 15 lakh job loss as many units would shut down if GST is increased.

In the meeting of the GST Council, Bhattacharya also raised two more demands. She suggested that the GST should not be hiked on footwear costing less than Rs 100 to 12 percent from 5 percent and also protested against the decision of increasing the GST from 12 percent to 18 percent on work contracts of government entities. Sources added that Rajasthan and Kerala have supported Bengal in its two demands and also protested against the same.

When contacted, Bhattacharya said: "It is a victory for Chief Minister Mamata Banerjee and Bengal as no one apart from her had raised the voice against the hike in GST for textile products since the very beginning."

In the meeting on Friday, Bhattacharya said that the decision of increasing the GST on several textile products to 12 percent would lead to 15 lakh job loss with the closure of one lakh units and appealed to reverse the decision. It would also adversely impact the textile industry that involves Rs 5.4 lakh crore economy and ensures employment of nearly four crore people. She also pointed out that the Centre's assumption of an increase in the GST collection by Rs 7,000 crore would not take place but instead, it will witness a drop as many companies will be forced to move out of its ambit by not going for renewal.

A few days ago, Principal Chief Advisor to the Chief Minister and Finance Department Amit Mitra had also raised the same issue and had appealed to Union Finance minister Nirmala Sitharaman to reverse the decision.