Surat-based textile industry is still reeling under the impact of GST. Textile industry watchers note that largely in weaving and trading, capacity use at most of the power looms and trading units is underutilised by around 50 per cent, however, spinning units are finding buyers in the knitting industry due to the winter season. The others in the textile supply chain, such as weaving and trading, are still finding business unsustainable, more so among smaller players.
Against 40 million metres per day of production in the Rs 500-billion synthetic textile hub of Surat, the current production has fallen to 2.5 million metres per day. So also in the weaving sector, as against a Rs 600-million daily turnover in the pre-GST days, this sector is still down by 50 per cent, said Ashish Gujarati, President of Pandesara Weavers’ Association.
Moreover, power looms continue to down shutters with around 250 to 300 looms daily being discarded as scrap. Also there are still several traders and weavers who are yet to register and come under the tax net. Smaller traders are still hit as the issue is not about the 5 per cent GST, it is about the additional costs of hiring accountants and investing in new technology that is hitting the smaller traders’ hard. This has led to a steep 50 per cent drop in business.
In good times there were 6,50,000 power looms, 150-200 wholesale textile markets, 20,000 manufacturers; including 10,000 weavers, 75,000 traders, 450 processing units; and 50,000-60,000 embroidery machines in the Rs 500-billion synthetic textile hub in Surat. Three industry associations, including silk weavers and textile processors, have made representations to the Centre for relief from post the impact of the GST on business.
Against a normal Rs 100 to 120 billion worth of business during Diwali through dispatch of 1,500 trucks daily for a fortnight, this year business had fallen to just 15 to 20 per cent. Tarachand Kasat of the Surat-based GST Sangharsh Samiti decried, “This was the first time we saw such a Diwali. In the last fortnight or so, which sees peak of Diwali dispatches, business was down by 15-20 per cent.