Traders say new tax regime hurt­ing their tex­tile busi­ness

Hindustan Times ST (Jaipur) - - Nation - Shailesh Gaik­wad Shailesh.Gaik­wad@htlive.com

IN POLL FO­CUS Thou­sands of traders in the bustling mar­kets of Su­rat are dis­grun­tled as the Goods and Ser­vices Tax has re­duced their profit mar­gins

un­usual hush has fallen over the bustling tex­tile mar­kets of Su­rat. Pre­vi­ously, trav­ellers would find it im­pos­si­ble to ne­go­ti­ate the maze of streets crowded with mini trucks and labour­ers with bun­dles heaped on their heads. Now, , the tex­tile hub in the heart of Gu­jarat’s rich­est city is lack­lus­ter even as mar­kets slowly open after a Di­wali break.

“We used to pro­duce four crore me­tres of syn­thetic cloth in Su­rat ev­ery day. It has come down to 2.5 crore me­tres,” says San­jay Jag­nani who heads the lo­cal tex­tile traders as­so­ci­a­tion.

Jag­nani is among thou­sands of dis­grun­tled tex­tile traders in the eco­nomic cap­i­tal of the western state who say prob­lems in the uni­form tax sys­tem, the Goods and Ser­vices Tax, ham­strung their busi­ness and hurt their profit mar­gins.

This re­sent­ment is the fo­cus of a high-deci­bel cam­paign for the assem­bly elec­tions as the Bharatiya Janata Party (BJP) tries to pla­cate its tra­di­tional vote bank and the Congress tries to cash in on the anger and ini­tial signs of anti-in­cum­bency.

Su­rat is home to around 65,000 traders, mostly Pati­dars, who have sup­ported the BJP for gen­er­a­tions but re­sorted to vi­o­lent ag­i­ta­tions two years ago to de­mand quo­tas in jobs and ed­u­ca­tion.

The an­nual turnover of the tex­tile in­dus­try is around ~400 crore and it em­ploys more than a mil­lion peo­ple. Traders say they were not badly af­fected by the gov­ern­ment’s shock re­call of high-value ban­knotes last year be­cause they mostly deal in credit. It was the prob­lems in GST that hit them hard.

Traders say the tax rate of 5% is not the prob­lem but that the process bogs them down. They claim small traders will be the worst hit. There’s an al­ter­na­tive school of thought, though: that be­fore GST, at least some small traders were not pay­ing tax (or at least, all the tax they had to).

What­ever be the case, the traders say busi­ness is down.

“The busi­ness is down by 40%. We are suf­fer­ing losses,” says Manoj Agar­wal, pres­i­dent of the Fed­er­a­tion of Su­rat Tex­tile Traders As­so­ci­a­tion that rep­re­sents Su­rat’s 165 tex­tile mar­kets. “Our prob­lem is that we have to spend time fil­ing re­turns. The trader has to fo­cus on his busi­ness be­cause in tex­tiles you have to con­stantly come up with some­thing new for con­sumers. We also have to give credit, up to three months. That is also get­ting af­fected.”

There’s more — all to do with the process. “Even a small trader has to file three re­turns in a month. They can’t af­ford keep­ing an ac­coun­tant. Servers are slow and fil­ing re­turns on­line is te­dious,” says Jag­nani. “In our es­ti­mate, about 30% small and medium busi­ness­men will shut shop if things don’t im­prove.” Even the up­com­ing wed­ding sea­son has failed to buoy or­ders and sen­ti­ment, he rues.

The anger spilled on to the streets. Traders called for a 22-day strike in July, took out a mas­sive protest march and didn’t cel­e­brate Di­wali, call­ing it a black fes­ti­val for them.

The gov­ern­ment has re­sponded with slash­ing the rates for some goods, ex­tend­ing fil­ing dead­lines and sim­pli­fy­ing pro­cesses. But many traders say they are still an­gry. “90% of the tex­tile traders were with the BJP. The gov­ern­ment is re­spond­ing now be­cause there are elec­tions and the rul­ing party is rat­tled. If the gov­ern­ment doesn’t

SU­RAT:An

traders power looms me­tres of cloth man­u­fac­tured daily em­broi­dery units

peo­ple in Su­rat de­pen­dent on the tex­tile in­dus­try.

VIJAYANAND GUPTA/HT

A worker at a tex­tile mill in Su­rat.

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