Amit Mitra calls on Prime Minister to hold emergency GST meeting to halt textiles rate hike

By

Isabelle Crossley

Published
Dec 28, 2021

West Bengal’s chief minister’s advisor and former West Bengal finance minister Amit Mitra went online to urge the Prime Minister to reverse the Goods and Services Tax Council’s plan to raise rates for textiles on January 1. 

“Modi Govt will commit another blunder on Jan 1,” tweeted Mitra on December 26. “By raising GST on [man-made] Textiles [from] 5% to 12%, 15 million jobs will be lost and 1 lakh units will close. Modi ji, call a GST Council meeting now and reverse decision before sword of Damocles falls on the head of millions of people.”
 
Mitra has been vocal about what he feels will be a disastrous tax hike and previously called on Union Finance Minister Nirmala Sitharaman to intervene with the GST Council’s plan. “If the tax [increase] is not reversed then the impact will be huge with job loss to 15 lakh (1.5 million) people, including those engaged in ancillary industry and closure of one lakh small units,” Mitra had told reporters at a media conference on December 24, citing a lower number of projected job losses than he would go on to predict two days later. “A lot of units will revert to the informal sector.”

Mitra has argued that raising taxes to an extent that especially smaller businesses cannot afford to pay will encourage tax evasion. This would result in less tax income for the government, the opposite of what the GST Council is trying to achieve through its GST hike. 
 
The Union Government is set to implement the new GST rates from January 1, 2022. India’s textile industry employs around 45 million people and includes many micro, small, and medium enterprises.