The textile and clothing industry has sought a uniform 5% Goods and Services Tax (GST) across the textile value chain.
Ravi Sam, chairman of the Southern India Mills’ Association (SIMA), and vice-chairman Durai Palanisamy told journalists here on Monday that the cotton textiles sector had an uniform GST rate of 5%.
The inverted duty structure is present only in the man-made fibre sector. Reports indicate that the government is looking at 12% rate from January 2022 for fabrics and garments priced less than ₹1,000.
“The SIMA wants uniform 5% rate,” Mr. Palanisamy said.
“If there is uniform rate at 5%, the compliance will be more,” said Mr. Sam. There will be no revenue loss for the government, they added.
The Clothing Manufacturers Association of India said in a press release that the government came out with schemes such as production-linked incentive and mega textile parks mainly to promote export of man-made fibre products.
The proposed increase in GST will hurt the cotton sector more. The Indian garment industry is largely cotton-based. Cotton garments, including traditional wear such as dhotis and sarees, will turn expensive, hitting the common man. Hence, the government should look at 5% duty across the textile value chain, the association said.
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