The Karnataka garment and hosiery sector is calling for significant changes in the Goods and Services Tax (GST) structure. Industry representatives are urging the GST Council to establish a uniform 5% tax rate on apparel and hosiery products and to include petroleum products within the GST framework.
They argue that the existing system of multiple tax slabs for garments, along with the exclusion of petrol and diesel from GST, is causing confusion, increasing costs, and contributing to inflationary pressures for consumers.
A memorandum has been submitted by the group to Finance Minister Nirmala Sitharaman, which cited that a single GST rate of 5% on garments and hosiery shall lessen the cost volatility, improve compliance, and eliminate disputes over classification.
The representation, led by Sajjan Raj Mehta, trade activist and former president of the Karnataka Hosiery and Garment Association, specified to include petroleum products under GST, marking that their continued exclusion has consequences in cascading taxes and higher input costs for industries.
As per Mehta, sectors like textiles, where most of the cost is spent on transportation, benefit if fuel comes under the GST net. “This step would enhance transparency, reduce overall costs, and also remove disparities in fuel prices across states,” he added.
The state’s concerns were being considered by the association for the likely loss of revenue. Collections from the rationalised tax structure with a wider base will get strengthened. Till the stabilisation of the revenue, a phased transition with compensation support to states has been suggested by the group to address the interim shortfall.
The memorandum specifying the impact of the consumer shows that the garments are a crucial commodity for every section of society. GST rationalisation shall support in controlling price rise, boost domestic demand, support local manufacturing, and make Indian textiles more competitive all across the world.
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“The Council must adopt a forward-looking approach that ensures ease of doing business, price stability and industry growth, while safeguarding state revenues,” Mehta expressed in the letter.
