Federation of Retail Traders Welfare Association (FRTWA) and other associations have urged Finance Minister Nirmala Sitharaman to roll back the proposed GST hike from 5 percent to 12 percent on garment, fabric and footwear products. They have argued that such a substantial rise will lead to massive job loss in the country especially when there has been a surge in COVID-19 and Omicron variant cases.
"Retail sector in India gives second largest employment after agriculture and after such high rate of GST the prices of products will rise from 15/20 percent. This will directly affect consumers of lower- and middle-class section of society," said FRTWA President Viren Shah.
"Our country is already facing huge problems of pandemic and in middle of such crisis to increase GST from 5 percent to 12 percent will be the death knell for garment and footwear industry" warned Shah.
Shah said that the surveys conducted by garment industry during 2020 and 2021 indicated that the pandemic has already seen the closure of 18-20% garment units across the country. Besides, there has been 20% drop in jobs in the garment industry which is the highest employer after agriculture.
‘’We strongly believe that the move to increase GST rates would be a case of the remedy being worse than the disease. Raising the rates will again increase the temptation of fringe players to revert back to the informal sector that will impact the government revenue collection under GST but also affect its other taxation streams,’’ said FRTWA in its representation to Sitharaman.
"We hope GST council will take serious note on this and roll back the proposed increase in GST to avoid unrest in the trading communities at large," he said.
