Textile traders in Ahmedabad began an indefinite strike on Monday, July 10, in order to mount pressure on the Centre to roll back the goods and services tax (GST) on cloth.

According to a release issued by traders associated with three major textile markets in the city – Maskati Cloth Market Association, New Cloth Market and Panchkuva Cloth Market – the 5% GST imposed by the Centre on fabrics is “not acceptable to anyone who is in the textile business.”

In Surat, textile traders have been on an indefinite strike for over one week, with thousands taking part in a mass rally on Saturday, July 8, to protest against the new tax regime.

Holding banners and placards, and shouting slogans, thousands of textile traders in Surat walked for three kilometres through the city’s main textile market in a mammoth rally led by Hitesh Sanklecha – a textile trader who has been on a hunger strike since July 1, Times of India reported.

According to an Indian Express report, at the conclusion of the protest, the textile traders handed a memorandum to the Surat district collector demanding that no GST be imposed on the textile-trading segment.

According to Hindustan Times, union minister Parshottam Rupala urged traders to refrain from protesting and instead engage in talks with the Centre. “The intention behind rolling out GST was to give a boost to trade and business, not to harass people. I agree that traders are agitating because they are facing some problems due to this new tax structure. But, the issue can be resolved with dialogue with the government.”

Meanwhile, lakhs of labourers working in powerlooms and processing units have been rendered jobless due to the shutdown of mills for over a week due to the ongoing strike.

Textile industry – the second largest employment sector of the country – including weavers, technicians, daily wagers and labourers, has been badly hit by the implementation of GST.

Under the new tax regime, master weavers are required to shell out taxes for yarn – 18% on man-made fibre yarn and 5% on cotton yarn – apart from paying a 5% tax on services.

While the loom owners are afraid that the rise in their manufacturing cost will not be off set by the tax on products, textile workers are staring at an uncertain future.

The powerlooms manufacture weaved cloth, which is purchased by textile traders who then send it to the processing units for dying and printing. There are around 350 processing units in Surat with a daily turnover of approximately Rs 70 crore.

The weavers have, however, shut operation due to the lack of demand leading to piling of unsold stock.

According to Indian Express, the printing mills have been running with leftover stock, making it difficult to keep operation going without any fresh supply, and as a result 70% of the factories have shut shop.

Demand for abolition of GST has reached other parts of the country as well with 5,000 textile producing units and retail shops and over 20,000 powerlooms in the Erode district of Tamil Nadu remaining closed for the fifth consecutive day on Monday, July 10.

According to the traders, they have incurred a loss of Rs 150 crore due to the ongoing stir and that huge stocks of unsold textiles have begun piling up in their shops, godowns and factories.

All major cloth markets in Amritsar also remained closed on Sunday, July 9, with traders demanding the government roll back its decision to impose GST on unstitched clothes, The Tribune reported. According to Jatinder Singh Moti Bhatia, the president of Federation of Textile Traders of Amritsar, taxes on the textile sector make the readymade and other garments costly, and traders fear that these taxes would make apparels luxury goods.

(With PTI inputs)