Stakeholders in the country’s carpet industry have alleged that the Centre’s Goods and Service Tax regime has hurt its exports and the livelihoods of around 20 lakh workers. The 18% GST on job works and 12% GST on their sale and purchase has led to a suspension of operations in almost 5,000 units, which could close down as a result, the Carpet Export Promotion Council said in a statement.

The council alleged that vendors were facing a tough time selling their old stock because they fear they will make losses because of the new tax. “No new orders are being executed and the weaving has almost come to a complete closure for new orders,” the statement said.

The council said Indian carpets were losing out against their Turkish and Chinese rivals because of the new tax regime. Mahavir Sharma, the council’s chairperson, urged the Bharatiya Janata Party-led government to consider withdrawing the GST on khadi products. Sharma said reducing the GST from 12% to 5% on purchase and sale of carpets would benefit traders and sub-contractors.

The council said it hoped the Centre would provide relief to the rural craft-based industry.