5% GST on handlooms: Weavers hit hard; TS govt call for tax rollback

Hyderabad: Telangana weavers are staring at an uncertain future after the center levied five percent GST on handloom products.

Addressing a press conference, the weavers requested the centre to rollback Goods and Service Tax (GST).

Recently, the central government imposed 5% GST on handloom products. This received flak from weavers across the country.

"Due to the short-sightedness of the central government on the handloom sector and its policies, the price of yarn has increased tremendously. Due to this, the price of handwoven textiles has also increased, and thereby the demand has decreased," said a representative from one of the weavers' associations.

"Modi Sarkar is making empty promises," said another representative from the weavers' community.

Weavers alleged that PM Modi undermined the Hank Yak Obligation (HYO). HYO is a mechanism to ensure adequate availability of hank yarn to weavers at reasonable prices. It mandates the production of a certain quantity of their total output as hanks against the normal production of cone yarns

."The central government initially decided to reduce the percentage of hank yarn from 40% to 30% and then cut it back to 15%. Due to this, the availability of hank yarn in the market has decreased and the prices have increased, making the survival of the handloom sector questionable," said another representative.

They pointed out the various schemes for the weavers were canceled by the centre. This included Lombard Health Insurance Scheme, house-cum-co-work shed schemes, and central share in the savings cum security scheme.

Weavers said the central government has made the rules for the Marketing Incentive Scheme tough. More importantly, the Centre abolished the All India Handloom Board in 2020. With this, the whole community was left without a decision-making body for the development of the handloom sector.

KTR's postcard campaign

A day after launching a postcard campaign, Telangana Handlooms and Textiles Minister KT Rama Rao started an online petition on change.org appealing to the Union Government to remove Goods and Services Tax (GST) on handloom products in order to safeguard the future of weavers and protect India's cultural heritage.

KTR said India is home to almost 5 million handloom workers who produce unique products without the aid of mechanical energy. And the highly decentralized and rural-based handloom industry mostly has women workforce.

Tweeting about the petition, KTR requested everyone to sign the petition and share it with their friends and family. He appealed to people to join hands for the noble cause.

"GST on handlooms is a direct threat to the millions of people who earn their livelihoods in the handloom sector. Weavers across the country unanimously oppose taxes on handloom since it had resulted in huge losses, forcing many to turn away from the traditional craft," he tweeted.

KTR said that the handloom sector is one of the largest unorganized sectors and forms an integral part of rural and semi-rural livelihood. "The handloom sector in India is reeling under the impact of the COVID pandemic and any move to increase the tax will sound the death knell for the sector," he stated, adding that handloom weaving represents one of the richest and most vibrant aspects of the Indian cultural heritage.

He said that this is the first government to levy GST on handlooms since independence.

On October 22, he wrote a postcard addressed to Prime Minister Narendra Modi to roll back 5% GST on handloom products. Several people followed suit and wrote postcards to the PM with a demand to remove GST on the handloom industry.