Tamil Nadu’s textile cluster is upset over the GST rates imposed on textile manufacturers, including job workers, who were so far exempt from any form of tax. While the principal manufacturers are to pay GST at 18 per cent, job workers will have to pay five per cent.
Tirupur, a knitwear and hosiery hub that earned Rs 25,000 crores through exports and posted a domestic revenue of Rs 12,000 crores in 2016–17, is dependent on job work at various levels of garment manufacturing for more than 80 per cent of its production. The textile cluster includes Coimbatore, Erode, Tirupur, Salem, Namakkal and Karur.
Owners of textile units say the power loom sector will be badly hit by GST. They say that for something that remains as an unorganized sector, the GST taxation procedure is too complicated. Chennimalai, in Erode district, is a handloom and power loom hub, employing over 15,000 people. Erode district has more than 3,00,000 people directly or indirectly engaged in the sector.
The power loom sector in Tamil Nadu provides employment to around 9,14,000 workers, and there are over 1,800 textile and spinning mills located in the state. The sector at Chennimalai is more of a cottage industry and more than 80 per cent of the products are sold in weekly shandies.