News >> Power loom sector staring at cost escalation, job losses

Power loom sector staring at cost escalation, job losses

Summary: The weaving industry in Surat has already scrapped over 1 lakh power loom machines and the losses are pegged at over Rs 3,000 crore. The GST on yarn is at 12 per cent and that the fabric attracts 5 per cent, leaving out 7 per cent accumulated tax credit for power loom weavers. As per the industry, apart from avoiding cost escalation, a timely refund could avert high import of fabrics and fall in capacity utilization. There were only 14,364 shuttleless looms in Surat. The annual polyester yarn consumption by power loom units in Surat was pegged at 40,610 lakh kilograms and annual fabric production at 91,871 lakh metres. The survey found there were a total of 4,88,649 power looms in Gujarat with Surat having the maximum number of 4,70,496.

 Surat: The Federation of Indian Art Silk Weaving Industry (FIASWI) has expressed serious concerns for power loom weavers in Surat and other parts of the country because of huge escalation of cost at the fabric stage, increase in job losses and import of fabrics due to non-refund of accumulated tax credit under Goods and Services Tax. FIASWI stated that central government was earning Rs 10,000 crore tax revenue from yarn spinners pre-GST. Post-GST, the estimated revenue has doubled at Rs 20,000 crore. It is only the man-made fibre (MMF) sector which is losing out on huge chunk of its capital due to non-refund of accumulated input tax credit. "We are demanding natural justice for MMF sector, As Reported By TOI. 

According to the Newspaper, All other sectors are getting input tax credit refund, except for MMF sector. The GST on yarn is at 12 per cent and that the fabric attracts 5 per cent, leaving out 7 per cent accumulated tax credit for power loom weavers. There is an estimated capital loss of Rs 7,000 per annum to power loom weavers alone," FIASWI chairman Bharat Gandhi said. According to Gandhi, textile industry fears costs could escalate by anywhere between three per cent and five per cent, which could further impact capacity utilization.