Bengaluru: Come Thursday, artisans from unorganized sectors will band together to fight the Goods and Services Tax (GST) regime under which handmade products, including textiles, have been taxed.Bengaluru: Come Thursday, artisans from unorganized sectors will band together to fight the Goods and Services Tax (GST) regime under which handmade products, including textiles, have been taxed. Led by the Bengaluru-based Graama Seva Sangha, artisans and textile workers will launch a `tax denial satyagraha’, with the clarion call, `don’t collect and don’t pay tax’. Protesters will sell products without charging GST.
Another satyagraha will be held in Hyderabad on September 9, spearheaded by the All-India Federation of Handloom Organisations. The GST Council is scheduled to meet in the Telangana capital on that day.
“The cottage industry was already dying and the GST regime has dealt it a final blow. Our protest is a last-ditch effort to save unorganized sectors which have been heavily taxed,” said B Shyama Sundari, coordinator of Dastkar Andhra, an NGO working for handloom weavers, and convenor of the federation.
The main demand is that handmade products be put under the zero-tax slab. Under the value added tax (VAT) regime, all handmade products were exempted from tax; they are taxed at different rates under GST. Even textiles, which were exempted earlier, now attract tax -yarn and fabric at taxed at 5%, readymade garments priced below Rs1,000 at 5% and those above Rs1,000 at 12%. Tax is levied on khadi and handloom products too.
“The stated objective of GST is to bring in equality among different sections of society and create a level-playing field. However, the tax structure defies this logic. For the first time in independent India, khadi, handloom and handicrafts have been taxed because of which handmade products have become expensive and the sectors is in the doldrums,” said Prasanna, a theatreperson who is mentoring the sangha. He also runs a khadi outlet.
“Handmade products such as khadi saris are already expensive as compared to machine-made products. With imposition of GST, a khadi sari has become costlier,” Prasanna added. The silk industry, in particular, is in deep distress. Earlier, the Centre had imposed 18.5% anti-dumping duty (ADD) on imported silk in a bid to protect the local industry.However, in the GST regime, the ADD on imported goods has been removed because of which the imported silk, especially China silk which is seen as a threat to the local industry , has become much cheaper compared to locally-produced silk.
“We have taken note of the discrepancy and have sent a representation to the Centre through the state finance department, seeking protective measures for the local textile industry. We hope the issue will be discussed in the next GST Council meeting,” said R Girish, commissioner of textile development and director of handloom and textiles, Government of Karnataka.
Another problem in the new taxation system is that artisans won’t find takers for handmade products if they are exempted from tax. This is because wholesale dealers don’t get get input tax credit if they purchase products from manufacturers who havn’t paid tax. So, wholesale dealers prefer to buy products from those who are registered under GST. Shyama Sundari said weavers were already facing the heat as dealers had stopped buying products from them.”Tax exemption won’t help. The products should be classified under the zero-tax slab so that manufacturers can get registered under GST but don’t have to pay tax,” said Atul Johri, who works with Channapattana artisans.’