Textile industry woes: Bhiwandi powerlooms continue to struggle with issues post GST

Since GST came into force on July 1, an entire ecosystem of the textile industry — weavers, technicians, daily wage workers and labourers — was hit as looms were forced to shut down. As an immediate aftereffect, around five lakh powerlooms closed in Bhiwandi in 20 days, according to estimates by owners or “master weavers”. The industry, which had remained exempt from taxation since Independence, reeled under the impact of GST regime. Now, the master weavers have to pay taxes for buying yarn — 18 per cent on man-made fibre yarn and 5 per cent on cotton yarn. They had raised concerns over the tax on job works —5 per cent on cotton yarn and 18 per cent on man-made fibre yarn. On August 7, the GST Council decided to cut it and adopt a uniform rate of 5 per cent.

Despite the relaxation, the looms are still struggling to go back to normalcy. Bhiwandi’s textile industry is decentralised where master weavers own powerlooms but sublet most work to contractors. The conversion of yarn to cloth requires at least 10 levels of work, including transport, sizing, warping, weaving, mending, folding and packaging, each needing special set of skills.

“We are encountering several challenges as we go. Accounting has become one of the biggest challenges,” said Momin. State GST Commissioner Rajeev Jalota said workshops are not being conducted anymore but regional offices are helping traders with filing. “We are helping traders with the process. Anybody having trouble can approach us and we will help them. We are also appealing to local trade associations to help traders and weavers,” he said.