Thousands of textile merchants in Surat had shut their shops for the last two weeks to protest the new tax structure.
The announcement to withdraw the protest was made yesterday by the traders who met Finance Minister Arun Jaitley in Delhi on July 17.
"During the meeting, Jaitley assured us that the issue of the Goods and Services Tax on cloth will be taken up in the next GST Council meeting to be held on August 5. Thus, we have decided to call off the strike till that date," said Manoj Agrawal, a textile trader.
"If no favourable decision comes in that GST Council meeting, we will think of going on strike again to raise our demand for abolishing the five per cent GST," he said.
Surat has one of the biggest textile markets in the country.
On July 3, thousands of protesting traders had gathered near the Ring Road in Surat, where the main market is situated, demanding the scrapping of GST on textiles.
Police then wielded batons to disperse the agitators who allegedly engaged in stone-pelting, an official earlier said.
On July 8, the textile traders organised a silent march in Ahmedabad to protest against the five per cent GST imposed on the sector.