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Sales of Khadi nosedive, shop owners blame GST

Kritika Agrawal

Khadi sells go down on Gandhi Jayanti

Prime Minister Narendra Modi may have asked people to support the growth of the khadi sector, but the ground reality seems different. This Gandhi Jayanti, sales of the fabric were down because of GST, according to shopkeepers.

Sales have been down this year after the implementation of GST, says Rajesh, manager of Khadi Bhandar on Old Airport Road. There is 5% GST on khadi cloth and 12% on the purchase and sales above Rs 1,000. 

“My sales have got down by 35%-40% after GST,” says Saurabh Goel, the owner of Khadi Bhandar  on Dispensary Road, Shivajinagar.

Shantanu Garg, who owns 10 Khadi Bhandars in Bengaluru, told The Observer: “There is not much effect of 12% GST on sales as most of the products are priced under Rs 1,000. But suppliers have incurred some losses due to it.” On the other hand, ” expensive products like quilts and leather products that attract 28% GST have faced losses”.

In his Mann Ki Baat address to the nation on September 24, Modi had said: “Khadi is not a fabric but an idea, a principle. I have noticed that these days interest in khadi has increased…. Sale of khadi has increased, and as a result of this, the poor man’s household has directly got connected to employment. Discount is offered on khadi from 2nd October and people get quite a good rebate. I once again urge that we should try and take forward the khadi movement.”

Dsimappa, manager of Khadi Bhandar in Banashankari, said : “Sales have been affected as compared to last year; they have gone down to Rs 1 lakh from Rs 5 lakh.” But due to festivals like Dasara and Gandhi Jayanti, sales have picked up.

At its meeting on September 9, the GST Council decided to exempt khadi fabric sold through Khadi and Village Industries Commission from 5% GST. But the decision doesn’t appear to have brought relief to small businesspersons who sell khadi and garments made from it.