Carpet Exports hit by GST

Carpet Exports hit by GST

Imposition of 18 per cent GST on job works and 12 per cent on their sale or purchase have badly hit shipment of handmade carpets and other floor coverings thereby affecting the livelihood of around 20 lakh workers and their families.

The Carpet Export Promotion Council (CEPC) based its findings on feedback received from various carpet manufacturers and exporters associations spread across the country. Almost 5,000 units have been inoperative and are on the verge of closure, spread across the carpet weaving belts, the council claimed.

Moreover, exports of carpets and floor coverings worth around Rs 1,000 crore have suffered on account of these production units being non functional.

“No new orders are being executed and weaving has almost come to a complete closure for new orders. The old orders and old stock is also not moving out of fear of imposition of tax, not getting increased price from buyers due to old contracts and worry on losing money,” the Council said.

Indian Carpets are already losing their competitiveness in the international market while other countries like China and Turkey are set to benefit and fill the space left by the Indian handmade carpets, the CEPC said.

It claimed that export orders worth Rs 2,000 crore have been cancelled as importers have refused to pay incremental cost.

“This has affected the livelihood of around 20 lakh of workers and their families in the carpet producing belts.” The affected families mainly belong to carpet producing belts in four states — Uttar Pradesh, Rajasthan, Haryana and Jammu and Kashmir.

–¬†Apparel and Textile News, Apparel Talk, Indian Apparel