Garments sector demands 5% uniform GST for the sector

The proposal to fix a uniform GST slab of 12% for the garments sector, if it goes through, will hit the ‘already battered’ industry and may lead to job losses, industry insiders fear. Currently there

The proposal to fix a uniform GST slab of 12% for the garments sector, if it goes through, will hit the ‘already battered’ industry and may lead to job losses, industry insiders fear. Currently there are two tax slabs - 5% for bills below ₹999 and 12% for bills above that. Calls for a uniform tax slab prompted a proposal to fix it at 12% for both slabs. However, representatives of the garment sector are demanding that it should be 5%.

“The industry, one of the largest employers, is one of the worst-hit by the pandemic. With no social gatherings and people working from home, sales have dropped by over 50%. People also do not have spending capacity. Meanwhile, the prices of raw materials have shot up significantly. In such a situation, hiking tax to 12% will further hit the industry,” said Sajjan Raj Mehta, of Karnataka Hosiery and Garments’ Association.

In a letter to Chief Minister Basavaraj Bommai, who was recently appointed chairman of the Group of Ministers on GST Rate Rationalisation, Perikal M. Sundar, president of Federation of Karnataka Chamber of Commerce and Industry, (FKCCI), said, “This sector may face closure leading to unemployment and loss of revenue to the government.”