Reduction of GST on silk to 2% sought

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K.M. Hanumantharayyappa, chairman, Central Silk Board, said he would shortly meet Textiles Minister Smriti Irani with a request to bring down the Goods and Services Tax (GST) on silk yarn and fabric from 5% to 2%.

Speaking to reporters in Mysuru on Friday, Mr. Hanumantharayappa, however, sought to play down the impact of the introduction of GST on silk goods from last month. GST becomes applicable only when the revenue from various value addition activities such as twisting, warping, dying, polishing, and the like crosses ₹20 lakh per annum. “Most units engage in these activities on a very small scale,” he said.

Though 5% of GST has to be paid at every stage of value addition right from twisting, Mr. Hanumantharayappa said weavers can recover tax paid through input tax credit, which will not make the end product very expensive. Despite this, he said he would meet the Ms. Irani on behalf of the weavers with a request to bring down the GST. Cocoons and raw silk remain tax-free. He also dismissed the possibility of GST on silk yarn and fabric that would lead to sericulture farmers receiving a raw deal for their cocoons.

The CSB chairman said he would also take up with the Centre the need to increase the duty on imported silk from 18% to the earlier 28%.

Despite the decrease in duty on imported silk, Mr Hanumantharayappa said silk from China costs around ₹4,000 per kg while indigenous silk is available at ₹3,600 per kg. The sericulture farmer can easily find a market for indigenously grown silk as the cost of Chinese silk is more expensive.

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