CMAI Welcomes GST Reforms, Urges Uniform 5% Garment Tax

The Clothing Manufacturers Association of India (CMAI) has expressed its wholehearted appreciation for the latest changes made in GST rates, particularly those impacting the textile industry.

CMAI stated that the government has addressed two of the industry’s long-standing demands:

• Removal of the Inverted Duty Structure by standardizing GST across the value chain, from fibre onward, at a uniform 5% rate
• Adoption of a fibre-neutral policy, aligning GST rates on man-made fibre (MMF) with those on cotton

Additionally, CMAI welcomed the decision to raise the 5% GST limit from Rs. 1,000 to Rs. 2,500, calling it a major positive step for the sector.

However, CMAI highlighted one key concern. In the entire value chain from fibre to garment, garments priced above Rs. 2,500 remain outside the 5% GST bracket. CMAI earnestly appealed to the GST Council to correct this disparity, urging that all garments, regardless of price, be taxed at 5% or that a more reasonable price threshold be introduced.

CMAI emphasized that garments priced above Rs. 2,500 are widely purchased by middle-class consumers, including woollens, festive wear, traditional Indian apparel, handlooms, and artisan-crafted garments. The current GST structure could significantly raise their prices, disproportionately impacting consumers and artisans alike.

CMAI concluded its statement by urging the GST Council and the Government to re-examine this issue and take steps to ensure fair and equitable taxation across the garment sector.