Raising GST on garments to impact small businesses, common man: TG Textile associations body   

The Telangana State Federation of Textile Associations has cautioned against any move to increase Goods and Services Tax (GST) rate on garments as that would impact small businesses and burden the common man.

“We are writing to express concern regarding proposed hike in GST on garments priced ₹1,500-₹10,000 to 18% [from existing 12%] and [introduce] a 28% levy on garments priced above ₹10,000. Such steep hike on textile garments will have severe consequences for the industry and common people, TSFTA president Ammanabolu Prakash said in a letter to Union Finance Minister Nirmala Sitharaman.

Roti, kapada and makaan (food, clothing and shelter) are fundamental necessities of life. Imposing a higher rate of GST on garments will disproportionately impact the textile and garment industry, which is a vital contributor to economic growth as well as generates considerable employment, he said. A higher levy will impact many small size textile and garment businesses that operate on thin margins, forcing them to rise prices resulting in lesser consumer demand and potential closure of the enterprises. More GST on garments would also lead to an increase in unorganised trade and tax evasion. Consumers would turn to informal material where taxes are not applicable thus reducing instead of leading to an increase in revenue.

In the letter, a copy which was marked to Union Coal and Mines Minister and MP from Secunderabad G .Kishan Reddy by the Federation, Mr. Prakash said with higher rates middle and lower income families will struggle to afford quality clothing. No other commodity priced above ₹10,000 attracts GST, even the rate levied on gold and silver is 3%. The Textile trade leader said the appeal is being made in the backdrop of reports that the GST Council is considering an upward revision in the rate and a new rate slab on garments in its meeting later this month.

Published - December 16, 2024 10:23 pm IST