[ad_1]
The recent proposal by the Group of Ministers (GoM) on Rate Rationalisation to change GST rates for the apparel sector has led to concerns in the textile and apparel industry on the impact of the proposed changes on jobs and MSMEs.
The GoM is said to be considering increasing the GST rates to 18% from 12% for garments priced above ₹1,500 each and to 28% for garments priced above ₹10,000.
“Take the case of woollen sweaters. It is not a luxury, but a necessity in northern States. It is not possible to get woollen sweaters at less than ₹1,500 and the proposal is to increase the GST on it by 50% from 12% to 18%. In the case of wedding clothing, the garments are all priced above ₹10,000 each. The entire wedding clothing segment will either get into the informal sector or get wiped out,” said Rahul Mehta, Chief Mentor, the Clothing Manufacturers Association of India (CMAI). All handwoven garments are priced more than ₹1,500 and increasing the rate on these garments will hit the handloom weavers.
In India, garments attract rates in two slabs – 5 % or 12 %. Now, the plan is to add another slab of 28%, he said.
According to Sanjay Jain, chairman of the National Expert Committee on Textiles of the Indian Chamber of Commerce, “Extending the 5% slab to garments priced up to ₹1,500 is a good move because it is eight years since GST was introduced and only garments up to ₹1,000 are in the 5 % slab. With inflation, the garment prices have increased. For apparel costing more than ₹1500, the rate should be retained at 12%,” he said.
The Confederation of Indian Textile Industry (CITI) and the Southern India Mills Association (SIMA) have pointed out the inverted duty structure for manmade fibre (MMF) sector. MMF fibre attracts 18% duty, yarn is 12% and fabric is 5%. Garments come under 5% or 12%.
However, dyes and chemicals are 18% or 28% and textile processing is 5%. This is an anomaly that the industry has been asking the government to address, said the SIMA chairman S.K. Sundararaman.
“Varying GST rates across the (MMF) value chain block working capital and stifle growth. CITI reiterates its previous recommendations to reduce GST rates on raw materials such as PTA and MEG from 18% to 12%. The proposed GST hike will disrupt the formal retail sector, driving consumers and businesses toward informal and unregulated channels. It is expected to heighten price inflation, disproportionately affecting price-sensitive consumers,” said Rakesh Mehra, chairman of CITI.
A statement from the CBIC said reports in the media regarding the Group of Ministers (GoM) recommendations on GST rate changes regarding various goods and services are “premature and speculative”. The GST Council has not yet deliberated on any GST rate changes. and the GoM is yet to finalise and present its recommendations to the Council after which the Council will take a final view on the recommendations. The Counsil is scheduled to meet at Jaisalmer on December 21.
Published – December 07, 2024 09:26 pm IST
[ad_2]
Textile and garment industry opposes proposed hike in GST rates for apparel
