The Andhra Pradesh Chambers of Commerce and Industry Federation (AP Chambers) has appealed to Nirmala Sitharaman, Union Finance Minister and Chairperson, GST Council to reconsider the proposed increase in GST rates for garments.
Under the proposed changes, the GST on garments priced between Rs 1,500 and Rs 10,000 would rise from 12 per cent to 18 per cent, while garments priced above Rs 10,000 would attract a 28 per cent tax.
Highlighting the potential consequences of these changes in a representation to the GST Council, Potluri Bhaskara Rao, President, AP Chambers, said, the proposed hike could severely impact the textile and garment sector in Andhra Pradesh, a major contributor to employment and the state’s economy.
The sector is already under pressure from rising input costs, global market uncertainties, and declining consumer spending, Rao emphasised. Increasing GST rates would further drive up garment prices, making them unaffordable for middle-income consumers and potentially leading to reduced demand, he warned.
Small and medium enterprises (SMEs), which dominate the garment industry and operate on thin profit margins, would bear the brunt of the increased tax burden. This could result in business closures, layoffs, and significant job losses across the sector, Rao cautioned.
The AP Chambers urged the GST Council to prioritise sustainability in the textile and garment industry, given its crucial role in job creation, industrial growth, and exports. The organisation appealed for the retention of the current GST rates to protect the sector's stability and ensure its continued contribution to the state’s economy.
The Chambers expressed hope that the GST Council would recognise the importance of the industry and take steps to avoid a tax increase that could jeopardise its future.
