Chennai, Aug 30 (IANS) The Federation of Tamil Nadu Powerloom Associations has called upon the Union government to ease the Goods and Services Tax (GST) on manmade fibre (MMF) from the current 12 per cent to 5 per cent, citing mounting challenges faced by the weaving sector in the wake of steep US tariffs.

Federation president L.K.M. Suresh said the powerloom industry, which supports over 20 lakh weavers across six lakh looms in Tamil Nadu and nearly 70 lakh people across India, is reeling under pressure.

Many units, he warned, have been forced to shut down operations, with looms being sold off as scrap.

While welcoming Prime Minister Narendra Modi’s announcements on GST rate reductions in select industries and the suspension of the 11 per cent cotton import duty until December, the federation argued that these measures have little impact on a sector already hit hard by the 50 per cent tariff imposed by the United States.

It urged the government to provide export incentives to sustain competitiveness in the global market.

On taxation, the association noted that GST on MMF, initially fixed at 18 per cent, was later reduced to 12 per cent after repeated appeals.

However, synthetic fabrics continue to be taxed at just 5 per cent. This mismatch forces manufacturers to pay the higher rate upfront and wait several months to recover the remaining input tax credit, creating severe cash flow issues.

Smaller mills, in particular, are burdened by high-interest loans taken to bridge this gap, further deepening their losses, he said.

The federation has therefore renewed its demand for a 5 per cent GST rate on manmade fibre, arguing that such a move would restore balance in the textile supply chain and give the beleaguered powerloom sector the breathing space it desperately needs to survive.

–IANS

aal/svn