Finance Minister Arun Jaitley on Tuesday ruled out exempting the textiles sector from the Good and Services Tax. He said not levying a GST rate on fabrics will make imported items cheaper and disrupt the existing input tax credit chain for the domestic industry, PTI reported.

Yarn and fibres made from silk, wool, cotton or other vegetable fibres are levied a 5% tax under the new GST regime, which came into effect on July 1. Textile traders have been protesting against the 5% GST on fabrics, demanding a rollback.

In a written reply to a query in the Rajya Sabha, Jaitley clarified that the textiles sector had been taxed in the past, as well. “In fact, in 2003-04, the entire textiles sector was subjected to central excise duty,” he said. “Generally, the GST rates are equal or lower than the pre-GST tax incidence. Therefore, the price of fabrics is not likely to go up.”

The finance minister also said that the Centre had taken measures to allow taxpayers to register for the GST, and that GST Sewa Kendras had been set up to familiarise taxpayers with the new indirect tax regime.