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Power point of contention

Saturday, July 15, 2017
By Raju Vernekar

Over 60 lakh power loom workers face unemployment due to GST

Over sixty lakh power loom workers in Maharashtra are facing unemployment due to the compulsory registration under the recently introduced GST, regardless of turnover and the imposition of GST at a steep rate.

Out of nearly 24 lakh power looms in the country, over 12 lakh power looms are in Maharashtra. Of these nearly 6 lakhs power looms are in Bhiwandi (Thane) about 30 kilometres from Mumbai. The looms in Bhiwandi, a key textile centre of western India, accounts for nearly 33 per cent of country’s total power looms.

Besides Bhiwandi, the power loom industry has been clustered at Ichalkaranji (Kolhapur), Solapur, Malegaon (Nasik), Dhule and Sangli. Most of these power looms are working in the decentralised sector. The power loom sector mostly comprises small units containing  2 to 4 power looms and they work on job work basis i.e. power loom holders obtain raw material from the traders and supply the woven cloth in turn at certain terms and rate of wages. The power loom sector provides direct employment to about 10 lakh persons.

As of now nearly 60 per cent power looms, which in any case are reeling under the burden of steep power tariff, have downed their shutters and the power loom owners are unable to reconcile with new tax structure.

Earlier, the power loom owners were required to register themselves with the state excise department and state sales tax department only if their annual turn over exceeded Rs 1.50 crore per year. That too, the registration was optional. However, now they are required to register themselves mandatorily if their turn out exceeds Rs 20 lakh turn per annum.

Although the power loom owners are categorised as “entrepreneurs”, basically they are job workers handling the jobs like doubling, twisting, yard dyeing, sizing etc. As such the government may levy the GST on spinning, the sale of grey cotton and finished garments, but all other activities should not be brought under the GST because the power loom owners hardly earn anything, Pratap Hogade, President of the Maharashtra State Power loom Association Coordination Committee(MSPLACC) said.

At present 18 per cent, GST is applicable to synthetic yarn and the readymade garments attract 5 per cent  GST. As such it is imperative that the Government gives a rebate in the VAT and CST already paid up on the stocks as of June 30, 2017, Hogade said.

A meeting of the representatives of various power loom associations was held in Mumbai on Friday to initiate measures to save the power loom industry in the state. The meeting was attended by Pundlik Jadhav, Sunil Mete (Ichalkaranji), Faizan Azmi, Abdul Mannan Siddiqui (Bhiwandi), Aziz muqaddam, Shabbir Degwala, Yusuf Elias (Malegaon), Prakash Sontakke(Murbad), Ashfaq Ansari (Yeola) and Poonam Kataria (Tarapore).

In the meeting, it was decided that state finance minister Sudhir Mungantiwar be urged to initiate steps to bail out the lower loom industry which is in bad condition due to drop in the sale of the power loom garments in the last few years. Hogade said that the committee will soon submit a memorandum to Mungantiwar seeking relief.

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