The proposed GST rate increase, which was suggested by the Group of Ministers (GoM) on rate rationalization, has caused the clothing industry to voice grave concerns. Clothing purchased between Rs 1,500 and Rs 10,000 will be subject to 18% tax under the new tax system, while clothing priced over Rs 10,000 would be subject to the highest GST slab of 28%. The 5% rate would continue to apply to clothing up to Rs 1,500.
The government has been encouraged to reevaluate the raise by the Clothing Manufacturers Association of India (CMAI), which has warned that it may result in a decline in consumer demand, a large loss of jobs, and disruptions in the value chain of the industry.
The group promoted a balanced approach to guarantee long-term sustainability and emphasized the necessity of government policies that support the industry’s growth and stability.
“By driving customers and businesses toward unofficial channels, the planned GST rate increase runs the potential of seriously upending the legal retail industry. This change would harm respectable stores while possibly helping dishonest vendors and illicit traders. Up to one lakh jobs could be lost in the already stressed textile sector, according to a statement from CMAI.
