Weavers to challenge 18% interest on ITC in Gujarat high court

SURAT: Power loom weavers have decided to challenge department of Goods and Services Tax’s circular (GST) in

Gujarat

high court that raises 18% interest demand on accumulated input tax credit (ITC).

Federation of Gujarat Weavers’ Welfare Association (FOGWA) office-weavers said the federation has already filed a public interest litigation in the high court for release of accumulated tax credit worth Rs650 crore from Central Government. Now, it will be challenging 18% interest demand raised by GST department in the high court.

More than 35 power loom weaving associations in the city and district had organized a meeting on Saturday where they unanimously decided to confront the Central Government over its decision on interest demand.

FOGWA president Ashok Jirawala told TOI, “This is something which will ruin the entire industry at one go. If you want ITC credit then you are bound to pay 18% tax. People here are not fools that for claiming ITC credit of 5%, they will pay 18% interest. We have decided to challenge this in the high court. Many small weavers had to shut down their units as they were not getting the tax credit from the GST department. The modernization in the textile industry has also come to a grinding halt.”

Ashish Gujarati, leader of FOGWA, said, “Central Government should understand the situation of the weavers. Weavers are the backbone of the industry and they are trying to destroy them. We will fight till our last breath.”