A Year Since Notes Ban, Surat Textile Traders Say GST Brought Bigger Worries

The double whammy of demonetization and a complicated tax structure of the GST has badly hurt the textile industry in Surat according to traders and loom owners.

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According to the power loom owners' association, after GST, production has dropped by half

Surat:  For what was once a bustling trade centre and one of India's biggest textile hubs, it's hard to believe Surat's textile markets now bear a deserted look. Traders say it is because of the devastating effect of the Goods and Services Tax or GST coupled with a low business Diwali which resulted in an extended break.

Sanjay Jagnani, who heads a traders' body, says from business worth around Rs 400 crore daily it's down to 150-200 crores a day.  "We are willing to pay 100% tax, double tax, but we appeal to the government to free us from this web of filing returns every two days," Mr Jagnani, the President of the Vyapar Pragati Sangh told NDTV.

Hetal Mehta, Vice-President of the South Gujarat Chamber of Commerce and Industry, told NDTV, "Demonetization affected us but we overcame that. Suddenly GST came in from July and that was one shot of the other. In textiles they were not even under the tax regime and that also was a problem."

At every textile market that we visited in Surat, traders complained about loss of business since the implementation of GST, but were extremely cagey when it came to providing documents to support their claim. Officials explain this is mostly because they've been brought under the tax net for the first time.

According to the power loom owners' association, after GST, production has dropped by half to 2 crore metres a day. Ninety thousand looms have shut and 50,000 labourers have lost their jobs. "The situation is very bad. First it was demonetization that hit us. And after GST came and hit harder. The traders don't want our stock and we have accumulated stocks," Hari Kathiria, Vice-President, Federation of Gujarat Weavers Association says.

Ishan Sawani, a powerloom owner says, "After GST and demonetization the situation is really bad and the demands of small scale industrialists have been kept before the chambers of commerce but nothing has been done for six months. Only election oriented cosmetic relief has been provided."

"The power loom shut before Diwali itself and there is no work. We keep coming but the owners turn us away, says Manoj Kumar, a labourer from UP who is hunting for jobs in Surat.

The ruling BJP rejects these claims. Member of Parliament from Surat, CR Patil says, "No one has lost their jobs. Industries don't have labour right now. Business has not been hit. In fact trade has increased. These figures are untrue."

At the local GST authority's office in Surat officials remained tight lipped and refused to share any data or information on the complaints by traders. Off the record they told NDTV that it would be impossible to detect any trend as far as increase or decrease in business is concerned as there is no previous data.

Prashant Shah heads the South Gujarat Commercial Tax Bar Association and he says neither the tax consultants nor the GST Suvidha Kendra staff could operate the GST-network for filing returns on one occasion. This is something officials confirmed too. Prashant Shah, President of the South Gujarat Commercial Tax Bar Association told NDTV, "It was never a good and simple tax. It is impossible to file returns. We have tried to file returns and found it's impossible to comply."

Sanjay Jagnani says, "Elections are around. If the government does good work people support them, and now people are in trouble. Traders have always supported the BJP but right now they are unhappy. Only after the elections will we know what this unhappiness means." 

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Hitesh Sanklecha, a trader who went on hunger strike against the implementation of GST, says this time the government may lose a section of its core vote base. "The way they have misled us, now every trader knows that this government has betrayed us. We will support Congress if the BJP does not keep its promises," he told NDTV.

The double whammy of demonetization and a complicated tax structure of the GST has badly hurt the textile industry in Surat according to traders and loom owners. Pre-election apps have provided some minor relief but till the time the major concerns remain small scale industries like this one has shut down or are on the verge of shutting down.

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