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New Delhi: Industry body Retailers’ Association of India (RAI) has urged the finance minister to reconsider the GST Council’s recent decision to increase taxes on several textile and apparel items from 5% to 12% effective January 2022.
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A 7% hike has been proposed to address the issue of inverted duty structure in the textile industry faced by a small segment of the total textile value chain. However, such a steep increase in the GST rate will adversely impact 85% of the industry while trying to ease the problem faced by less than 15% of the industry, RAI said in its note.
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The industry body said the pandemic has already dealt a body blow to the apparel industry as prolonged lockdowns and weak consumer demand led to a decline in sales of clothing.
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“On the business side, it will add to the financial burden of an already-stressed sector, slow down its pace of recovery and affect working capital requirements especially in the case of MSME businesses which account for 90% of the industry. On the consumer side, it will lead to a rise in the prices of garments, thereby hurting consumption. On the government side, in the long run, it may lead to many unorganised businesses going out of the GST net," he added.
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Discalimer: this information has been collected through secondary research and posted by third party therefor textilemarket. In is not responsible for any errors in the same.
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