Home / Knowledge / News / Textiles / Industry expects uniform 5% GST rates on textile items
Industry expects uniform 5% GST rates on textile items
May '17
The textile industry has been urging the Central government to decide a uniform Goods and Services Tax (GST) rate of 5 per cent for items across the textile value chain. The Council is expected to reach a consensus regarding the tax structure during the two-day meeting chaired by Union finance minister Arun Jaitley, which is currently underway in Srinagar.

The industry associations have also called on the government to cover all segments under the new tax structure in order to discourage tax evasion.

Over 20 textile associations led by the Southern India Mills' Association (SIMA) had recently issued a joint memorandum to the Union textiles minister Smriti Irani. They said that the entire cotton textile value chain is currently enjoying the zero per cent Central Excise benefit under optional Cenvat from 2004. Under this scenario, a uniform levy of 5 per cent GST on all textiles and clothing products would ensure smooth migration of entire textile value chain from the present tax structure to GST tax structure with full compliance, creating win-win strategy for all the stakeholders and would bring substantial revenue to the exchequer when compared to the existing revenue.

Talking about his expectations from GST, Sriramulu Balakrishnan, MD, KG Denim told Fibre2Fashion, "At present, fabrics do not attract excise duty or sales tax (in most states in India). Post-GST, the textiles industry expects that it should be nil rate of tax or be minimum. Representations have been made to the ministry of textiles by TEXPROCIL. Branded apparel is subject to both excise duty and sales tax. Any GST on fabrics and yarn can be utilised by brands and retailers as credit for their operations."

Vikram Mahaldar, VP & global sales head of OCM Pvt Ltd believes that after the GST is imposed, mills and buyers will have to pay extra money for fabrics made from natural fibre, as they are exempt from any taxes in most part of the country. This may lead to short term decline in demand till channel stocks last, and until customers accept the change.

"However, segments like synthetic fabrics, the price increase can be offset, to an extent, with lower cost of inputs, which are taxed," Mahaldar told F2F.

As for the e-commerce sector, it is likely to bring in greater convenience as GST promises standardisation for online marketplaces. "The 'one tax, one market' concept on which GST is based is expected to be a big welcome step and promising standardisation for online marketplaces to make e-commerce convenient. I believe once GST comes into full effect, e-commerce sector would be structured well and the way forward will be easier," said Jimmy Kaul, MD and co-founder of Shopotox. (KD)

Fibre2Fashion News Desk – India

Interviews View All

Arvind Saraf, Triveni Sarees

Arvind Saraf
Triveni Sarees

e-Commerce is still evolving fast with constant flux and surprises

Dharmendra Shah, Ozone PB Spintex Limited

Dharmendra Shah
Ozone PB Spintex Limited

‘We have made huge investments to ensure quality yarn production.’

Amardeep Singh, Orient Craft

Amardeep Singh
Orient Craft

'In export markets, the trend in terms of embroidery, is towards matte...

Eric Schoeller,

Eric Schoeller

Groz-Beckert is the world's leading provider of industrial machine...

Davide Maccabruni,

Davide Maccabruni

Schärer Schweiter Mettler (SSM) manufactures and supplies textile...

Anupam Arya,

Anupam Arya

<div>Jaipur-based Fabriclore Retailing Pvt. Ltd. is attempting to revive...

Kai Poehler, Voith Paper GmbH & Co. KG

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Razvan Popescu, Directa Plus SpA

Razvan Popescu
Directa Plus SpA

Directa Plus is one of the largest producers and suppliers worldwide of...

Isabel Herranz, European School of Business & innovation

Isabel Herranz
European School of Business & innovation

Cutting-edge ideas like the Internet of Things and artificial intelligence ...

Aneeth Arora, Péro

Aneeth Arora

The Woolmark Company has partnered with handmade fashion label Péro and...

Adriano Goldschmied, AG Jeans

Adriano Goldschmied
AG Jeans

The hype around 'designer jeans' was created by him. And the new wave of...

Cigdem Akin, Cigdem Akin

Cigdem Akin
Cigdem Akin

She has carved a niche for herself as the national brand of Turkey. Her...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


Leave your Comments

November 2019

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category

Related Categories:

Follow us on instagram


Follow Fibre2Fashion On

Advanced Search