Cuttack, July 2: The Cuttack Textile Merchants' Association has expressed unhappiness over imposition of 5 per cent Goods and Services Tax (GST) on textiles.

The association demanded that the government should keep cloth merchants away from the GST. "We are not opposing the GST, but the tax that is levied on textiles," said its president Sushil Kumar Choudhury.

The association wanted the GST council to roll back its decision as, earlier there were no taxes on retailers and wholesalers selling cloth. "Textile sector was never levied any kind of tax, be it service tax, VAT or excise. So, the GST makes no sense," Choudhury said.

The association members alleged that these new tax rules would disturb the entire trade system.

The merchants' body, an umbrella organisation for more than 300 cloth wholesalers in Cuttack city, was worried over different taxes that have come with the GST coming into force since June 30 midnight. Its members said the GST on cotton and natural yarn, which was not covered under the excise law so far, would now be 5 per cent and 18 per cent on manmade yarn.

Similarly, the GST on clothes will be 5 per cent. In addition to the GST, apparel and readymade garments with a value of less than Rs 1,000 would be charged 5 per cent tax, while garments of a value of over Rs 1,000 value would be charged 12 per cent. The work on apparel would attract 18 per cent tax.

"The government should not impose GST on textiles going against the interest of both cloth merchants and buyers," said association secretary Hanumant Singh.

"The GST would adversely affect the retailers and small-time vendors. More than 80 per cent of the people buy clothes from local merchants," he said.

The association claimed that there would be 4 to 5 per cent rise in prices for consumers. "All the taxes on textiles should be limited to manufacturing level as it would ease out the burden on retailers and the consumers," said the association's vice-president Vikash Chapolia.

It has so far not gone for downing shutters to protest against imposition of the GST on textile following the footsteps of its counterparts in various parts of the country. However, it has expressed solidarity with the protesters.

The annual turnover of the textile merchants in the city is around Rs 1,000 crore.