The GST council’s decision of considering any rate revision only after three months has come as a severe blow for the garmenting, made-ups and synthetic spinning sectors. The industry was hoping job work relating to garmenting/made-ups would be included under the service tax list of five per cent GST rate, according to Southern India Mills Association (SIMA)

More than 80 per cent of the garment/ made-ups manufacturing units are in the decentralized sector and undertake job work. The industry fears these units would become unviable with a 18 per cent service tax on job work when compared to vertically integrated manufacturing units.

The apprehension is that the decision to consider GST revision after three months would paralyze the decentralized garment/ made- up segments that predominantly function with job work. Thousands of units in the synthetic spinning sector would be closed and throw several lakhs of people out of jobs.

The Southern India Mills Association wants job work in the garment and made- up segments to be included under the five per cent service tax. It also wants the GST rate on manmade fiber and blended yarn to be reduced from 18 per cent to 12 per cent.

The garment / made-up sector is thought to be the largest employment provider in the entire textile value chain creating 100 to 150 jobs per a crore rupees of investment.