Silk Prices Stop Surging After Goods and Services Tax

Previously, Chairman of Central Silk Board K.M. Hanumantharayappa had requested to the government to cut down the taxation rates from 5 percent to 2 percent on silk yarn and fabric. Now the Central Silk Board has announced that the GST implementation will not increase the silk prices.

While interacting with media persons, Chairman, K.M. Hanumantharayappa said that the production of raw silk nearly 28,000 metric tonnes annually, out of them 98 percent belongs from Mulberry category. Muga, Eri, and Tusar were three different categories of Silk.

The Central Silk board find out that the present production of raw silk annually had improved by 10,000 metric tonnes, The chairman added that, If the sericulture farmers opted the food plant category which suited their region, the production of cocoon could be maintained by them at the advanced level.

“For instance, cultivation of rain-fed plants in rain-fed areas and water intensive variety in areas where more water was available should be taken up,” said K.M. Hanumantharayyappa.

Read Also: Goods and Services Tax Impact on Agriculture Sector in India

Chairman K.M. Hanumantharayyappa said that, once the production of raw silk would enhance, the prices of silk products would be reduced and the demand-supply would also fall.
Previously, the silk farmers were harvesting four crops in the whole year, but from now onwards with four varieties of food plants, they would be able to harvest 10 crops in the whole year.

Silk Producers are fearing that due to the implementation of the Good and Services Tax (GST) would increase the prices of silk finished products. Chairman said that once the prices of raw silk reduced cost of the finished goods would automatically fall.

The Chairman had informed to businesses who are operated in the silk industry so that they would be able to avail GST exemption. Since most of the sericulture farmers earned below the limit of Rs 20 lakh turnover in a year. Silk Businesses whom annual turnover below Rs 20 lakh would not be liable to pay GST.

The small manufacturers of silk Sarees will have to pay 2% GST on sales and in a case if their annual turnover lies in between Rs 20 lakh and Rs 75 lakh. That annual turnover above Rs 75 lakh will have to pay 5% GST in every year.