New Delhi, Dec 20 (KNN) With the Goods and Services tax (GST) in its sixth month since implementation, the denim industry comprising of a fair share of Micro, Small and Medium Enterprises (MSMEs) are in bad shape as manufacturing capacity is on a down graph, Denim Manufacturers Association informed.

Talking to KNN, Gagandeep Singh, Company Secretary of Denim Manufactures Association explained the situation.

Singh informed that ever since the roll out of the new tax, the denim industry have seen a decline by over 30 per cent to 40 per cent in its operating capacity and the units are beginning to go out of business.

Explaining the concerns, Singh informed that the production is heavily disturbed due to the placement of branded items under 12 per cent GST, in case it crosses the 1000 rupee mark.

Following the GST implementation the demand from local consumers as well as importers was not in a good tone, resulting in poor performance of the sector.

Listing complications under the new taxation, Singh informed that the fabric sector seems of two strata that function together, while one strata is formal and organized and therefore can come easily into the GST mechanism, it is practically difficult for the unorganized strata to be a part of the new taxation.

The Association earlier in a release said that the number of denim fabric mills are out of orders and are experiencing a massive slowdown. (KNN/ DA)