Opposition to Proposed GST Rate Changes
The Karnataka Hosiery and Garment Association (KHGA) has raised concerns over the proposed hike in GST rates for readymade garments, stating that it could negatively impact the garment industry. In a pre-budget memorandum to Union Finance Minister Nirmala Sitharaman, KHGA emphasized the need for a uniform GST rate of 5% across all garment categories to maintain affordability and industry growth.
Proposed GST Slab Rates
Currently, garments priced up to ₹999 are taxed at 5%, while those above ₹999 attract a 12% GST. The Group of Ministers (GOM) has proposed the following new rates:
Up to ₹1,500: 5%
₹1,500 to ₹10,000: 18%
Above ₹10,000: 28%
These changes would introduce an additional tax slab, potentially burdening consumers and traders.
Impact on Affordability and Industry Growth
KHGA President Prakash Kumar T Bhojani argued that garments are essential items and should remain affordable. “The introduction of three tax slabs, including a 28% rate for higher-priced items, will deter buyers and stifle the growth of the textile industry, which already contributes significantly to government revenue,” he said.
Middle-Class Concerns
Sajjan Raj Mehta, Chairman of the Taxation Committee at KHGA, expressed worries about the financial strain on middle-class families. He stated, “Higher GST rates will force families to compromise on purchases, discouraging them from buying items they prefer.”
Call for Uniform Taxation
KHGA strongly advocates for a single GST slab of 5% across all garment categories to ensure affordability and protect industry growth. Traders warn that the proposed changes could lead to reduced sales and economic challenges in the garment sector.
