Textile industry body raises concerns over proposed GST hike on ready-made garments

New Delhi, Dec 5 (PTI) Textile industry body CITI on Thursday raised concerns over the proposed upward revision of GST levy on ready-made garments, warning of potential far-reaching impact on the industry, employment, and the overall economy.

The Confederation of Indian Textile Industry (CITI) also urged the government to reconsider the proposed hike in GST (goods and services tax) rate and adopt a balanced approach that fosters growth in the textile sector while ensuring consumer affordability.

"Under the proposed framework, garments priced up to Rs 1,500 will continue to attract a 5 per cent GST rate.

"However, garments priced between Rs 1,500 and Rs 10,000 will face a steep increase to 18 per cent, and those priced above Rs 10,000 will fall under the highest tax slab of 28 per cent," CITI said.

CITI has also flagged the persistent issue of an inverted duty structure (IDS) in the man-made fibre (MMF) segment, where varying GST rates across the value chain block working capital and stifle growth.

The proposed GST hike is expected to heighten price inflation, disproportionately affecting price sensitive consumers, it argued.

"Higher taxes on garments tied to celebrations and festivals will slow down consumption at a time when demand is already under pressure. This could have a ripple effect on the economy, and the textile sector is a cornerstone of India's economy, providing livelihoods to millions. Policies must nurture its growth rather than create hurdles," said Rakesh Mehra, Chairman, CITI.

CITI fears that the proposed hike will disrupt the formal retail sector, driving consumers and businesses toward informal and unregulated channels. PTI RSN HVA