Manufacturers worry over Centre's plan to increase GST on fabrics

kolkata: Hosiery and garment manufacturers on Thursday expressed concern on the Central government's proposed plan to increase the GST base rate of five per cent on the pretext of Inverted Duty Structure from January next year.

An 'Inverted Duty Structure' means a higher duty on inputs and a lower levy on finished products.In September, the GST Council made tweaks in tax rates including an increase in the GST levied on footwear costing less than Rs 1,000 as well as readymade garments and fabrics from five per cent to 12 per cent. It will be implemented from January 1, 2022. "If they bring everything to 12 per cent to correct the inverted duty structure, the common man will have to pay seven per cent extra. That will lead to a one-shot increase of seven percent in prices," said Raj Dugar, vice-president of Eastern India Garment Manufacturers and Exporters Federation.

"We urge the Government and GST council to review their decision and maintain the current status quo of the GST rate on Hoisiery, Knitwear Fabric and Garment Industry. The proposed increase in the GST rate will affect over 10 lakh people associated with the garment manufacturing industry in Bengal," said Alam Fakir, secretary of Bangla Readymade Garment Manufacturers and Traders Welfare Association.