Textile industry seeks uniform GST rate

The textile industry is pitching for a fibre-neutral GST at 5% for the entire textile and apparel value chain.

Currently, cotton-based textile sector has 5% GST, except for garments priced above ₹1,000. These garments attract 12% duty. However, in the Man Made Fibre (MMF) sector, the GST on PTA (Purified Terephthalic Acid) and MEG (Monoethylene Glycol) that are critical raw materials for polyester production is 18%, MMF filament and spun yarn attract 12% duty, fabric and garments are at5 %, and garments and fabric priced above Rs. 1,000 a piece are at 12%.

There should be no inverted duty structure and there should be a fibre-neutral rate which is the lowest in the GST slabs, said RK Vij, secretary general of Polyester Textiles Apparel Industry Association.

If the industry should achieve the target of $100 billion annual exports and $250 billion domestic sales by 2030, all sectors of the textile industry should grow. For now, there is no major expansion in the pipeline for three years in the viscose sector and the cotton sector is not growing. The growth of the MMF sector is crucial and hence, the government should rationalise the GST rates for this sector, right from the raw material stage, he said.

According to K. Selvaraju, secretary general of the Southern India Mills Association, garments and fabric priced above ₹2,000 should be levied 12% duty and for the other products across the textile value chain, be it cotton, viscose, or polyester, the rate should be 5%. The micro, small and medium-scale enterprises are struggling when funds are blocked in tax paid for inputs. MMF-based fabric and garment are the most affordable for the common man. And, hence, MMF sector should also be brought under uniform 5% duty. Further, textile and apparel sector is the highest job-generating industry and it should attract investments to create more jobs. Rationalisation of the GST rates will help make investments viable, he said.