Khadi, a fabric often associated with India’s freedom struggle, has so far been exempted from any kind of taxes. However, after GST, now Khadi too comes under the ambit of tax and the traders in the state are worried that it will affect their business.

Though Khadi yarn, Gandhi topi, India’s national flag will not attract any tax under the GST regime, other apparels and Khadi products will have 5 per cent -18 per cent GST.

There are nine Khadi Bhandars in the Kota division whose trade has been hit since the launch of GST from July 1. These sell Khadi cloth, readymade Khadi apparels, including kurta pyjama, Nehru jackets, carpet and other products.

“Business has been hit since the enforcement of GST from last six days. Customers are not buying khadi due to a rise in their prices,” said Kamal Kishore Sharma, secretary of the Hadoti Khadi Gramodhyog Samiti (HKGSK). “The fabric, which has been free from any kind of taxation since Indian Independence, has been brought under GST and it is hurting sales. The decision to impose GST will ruin khadi organisations and its weavers,” he said.

While 5 per cent GST has been imposed on khadi cloth, 12 per cent GST has been imposed on the sale and purchase of readymade Khadi products above Rs 1,000 and 18 per cent GST on poly cloth of Khadi (polyester khadi mix cloth).

He said that the annual trade of Khadi in Kota is around Rs 2 crore and there are around 500 khadi weavers in Kota division.

“If sales go down due to taxation, it will reduce production of Khadi and thereby affect khadi weavers,” said a Khadi weaver, Mohammad Irfan, from Kota. He added that since Khadi is a handloom it should be free from any kind of tax.

The owner of Khadi India in Chhawani area, Ashok Jain, said that demonetization has already reduced khadi sale and now GST has reduced daily sales from Rs 15,000 per day to Rs 2000-to-Rs 2,500 per day.

“Khadi is a costly cloth and GST will make it costlier,”  Jain said.

However, Sharma said that the discount on Khadi cloth —15 per cent discount by the Union government round the year and 10 per cent discount from Gandhi Jayanti to the death anniversary of Mahatma Gandhi on January 31 given by the state government, will continue.

Meanwhile, the Congress has criticised imposition of GST on Khadi. “Khadi is the soul of the country but GST on khadi exposes the mindset of the BJP which has not participated in the Indian freedom struggle and now wants to discourage people from wearing Khadi,” said Pankaj Mehta, general secretary of Pradesh Congress Committee, Rajasthan.

Source: Hindustan Times