The Andhra Pradesh Chambers of Commerce and Industry Federation (AP Chambers) has formally appealed to Union Finance Minister Nirmala Sitharaman, urging her to reconsider the proposed increase in Goods and Services Tax (GST) rates on garments. The suggested changes include raising the GST from 12% to 18% for garments priced between ₹1,500 and ₹10,000 and imposing a hefty 28% GST on items exceeding ₹10,000.
In a letter addressed to the Finance Minister, AP Chambers President Potluri Bhaskar Rao emphasized the critical role of the textile and garment sector in providing employment and supporting the state’s economy. The proposed tax hike is expected to exacerbate existing challenges faced by this sector, which is already dealing with rising input costs, fluctuations in global markets, and a decline in consumer spending.
The letter highlights that such a tax increase would lead to significantly higher garment prices, rendering them unaffordable for middle-income consumers and potentially causing a drop in demand. This situation could be particularly detrimental for small and medium enterprises (SMEs), which make up a large portion of the industry and operate on narrow profit margins. Rao warned that many SMEs might struggle to absorb the additional tax burden, with some possibly facing closure.
The AP Chambers has called on the GST Council to prioritize the sustainability of this vital sector, advocating for policies that support rather than hinder its growth. The organization remains hopeful that the government will heed their concerns and maintain a balanced approach that fosters industry stability while ensuring affordability for consumers.
