Emphasising that the current tariff wars are already threatening to deal a death blow to the export sector of textiles, the Clothing Manufacturers Association of India (CMAI) has urged the government to for a uniform 5 per cent Goods and Services Tax (GST) to fortify domestic textiles.
While hailing the Centre’s decision to amend the GST rules, the association cautions that it has not been clarified whether the entire spectrum of textiles, particularly garments, will be brought under the 5 per cent slab, or only garments within a certain price range.
“Keeping textiles products along with products like electronics, mobile phones etc. under the same GST slab would not be consistent from an overall economic rationale and consumer perspective,” highlighted Santosh Katariya, President, CMAI.
With the underlying logic that textiles is always considered an item of mass consumption, an essential commodity, and universally taxed at the lowest slab of taxation, the association has been continuously advocating a single and uniform rate of GST for all sectors of the textile Industry, at the lowest slab, which is 5 per cent.
“One of the categories which will suffer hugely is our traditional handloom and embroidered garments, which are intrinsically more expensive compared to synthetic and machine-made garments due to their very nature. Should we charge a higher tax to our home-grown traditional clothing?,” stated Rahul Mehta, Chief Mentor, CMAI.
Katariya further expressed his concern, stating that levying 18 per cent GST on products priced above a certain price point will only encourage going back to the earlier era of informal transactions. Any such arbitrarily determined price point will only encourage manufacturers and traders to avoid raising Invoices, or under-valuing them, Katariya added.
News Courtesy: Businessworld