Shawl manufacturers demand single tax slab under GST

Neeraj Bagga

Tribune News Service

Amritsar, February 5

Shawl manufacturers have demanded one tax slab under the GST instead of the current two tax rates.

Shawl Club of India general secretary Piaral Lal Seth has said that shawls under the harmonised system of nomenclature (HSN) code 6,214 are categorised into two rates under the GST — five per cent for the goods valuing below Rs 1,000 and 12 per cent for above.

He said shawls witnessed a decrease in sale since the introduction of the two different tax rates. Majority of the shawl manufacturers fall under the MSME sector.

It is pertinent to mention that sarees, unstitched suits and suitings have already been brought under the single GST rate of five per cent irrespective of their value.

Locally manufactured shawls form the export bulwark for the traditional winter wear from the country. Earlier, rise in prices of Merino wool in Australia cast its shadow on the price of high-end woollen shawls in the country. Merino wool, also called pure wool and is used in producing worsted yarn, and Kashmir wool, the first tender wool of sheep, in Australia is likely to raise the prices of high-end woollen shawls in the country.

There are two categories of shawl manufacturing units in city — traditional obsolete power looms and modern looms with electronic jacquards. There are about 2,000 traditional looms being operated while about 450 sophisticated electronic jacquard machines, mostly imported from Italy, are rolling out shawls and stoles with latest designs.

According to manufacturer Rajinder Jain, there is a sea change in quality of material being produced from the sophisticated machines apart from quantity.

Shawl Club of India chairman Santosh Arora says shawl is a Rs 3,000 crore industry in the country with manufacturing centres in Amritsar and Ludhiana in the state, adjoining Jammu and Kashmir, Kullu region of Himachal Pradesh, besides north east.

Of this, export stands at about Rs 1,000 crore. The share of the holy city’s shawl industry is robust with about Rs 1,700 crore, including Rs 600 crore export.

The popularity of shawls and stoles has seen a phenomenal growth across the world. These are being exported to almost all the European countries, the US, Australia and Russia.

China has entered the shawl market with polyster shawls and is known for garnering bulk orders.