Man-made fibres may see a slimmer fit in 5% bracket

GST on high-end garments may rise from 12% to 18%

- NARAYANAN V

IN A MAJOR boost to India's $184 billion textile and apparel sector, the government plans to slash GST on man-made fibres (MMFs) from 18% to 5%, addressing a long-standing duty issue inversion.

The high input taxes on synthetic fibres and concentration of the capacities in the sector have been an impediment to India's efforts to achieve a quantum leap in exports of textiles and clothing items. While synthetic-based textiles dominate the world market with a 75% share, India has had a cotton-dominated industry, undermining its growth potential.

According to sources, the Union government may propose reducing GST on synthetic or artificial staple fibres, synthetic or artificial filament tow, and waste of man-made fibres to 5% at the 56th GST Council meeting scheduled for September 3-4, in New Delhi.

Besides, the tax on synthetic filament yarn may be reduced to 5% from 12%.

GST on knitted or crocheted apparel priced above ₹2,500 per piece is set to rise to 18% from the current 12%, while clothing priced up to ₹2,500 will remain at 5%.