The Goods and Services Council has proposed to fix inverted duty charges on readymade clothing from January 1, 2022. From January 1 onwards, the duty fix may raise the price of readymade clothing. Customers purchasing ready-made clothing will have to pay up to 7% more than they do currently.
Garment traders raised concerns about the sale of garments, stating that higher raw material prices resulted in a 20 percent increase in readymade clothing prices last year, and that if raw material prices continue to rise, the sale of clothes will suffer.
GST is charged at a rate of 5% on readymade clothing costing less than RS 1,000, which can be increased to 12%. 85 percent of clothing sold in India are priced under Rs 1000, and a rise in customs duties will increase the price. Sanjay Jain, former head of the Confederation of Indian Textile Industries, stated that “the price of clothes has already climbed by 20% in the last year.”
From January 1 onwards, the cost of clothes by seven percent will further reduce the business. Traders are expressing the apprehension of a boom in purchases without receipt due to this decision. “At present, five percent GST is levied on cotton yarn and fabric, but under the new decision, 12 percent GST will be imposed on garments made from cotton,” said CMAI chief Vinay Jain.