Retailers Affiliation of India urges govt to rethink proposed GST fee hike on textiles, apparels, Retail Information, ET Retail

Retailers Association of India urges govt to reconsider proposed GST rate hike on textiles, apparelsRetailers Affiliation of India (RAI) on Tuesday urged Finance Minister Nirmala Sitharaman, state governments and GST Council to rethink the proposed hike in GST charges on a number of textiles and attire objects to 12 % from January saying it’s going to adversely impression 85 % of the sector. Stating that the attire retail companies are already ailing, RAI mentioned the 7 % hike has been proposed to handle the difficulty of inverted obligation construction within the textile business confronted by a small section of the overall textile worth chain.

“Nevertheless, such a steep enhance within the GST fee will adversely impression 85 % of the business whereas making an attempt to ease the issue confronted by no more than 15 % of the business,” the retailers’ physique mentioned in an announcement.

RAI CEO Kumar Rajagopalan mentioned, “The rise in GST charges on textiles and attire is just not in anyone’s curiosity on account of its impression. On the enterprise aspect, it’s going to add to the monetary burden of an already-stressed sector, decelerate its tempo of restoration and have an effect on working capital necessities particularly within the case of MSME companies which account for 90 % of the business.”

GST Council in its assembly in September had determined to appropriate inverted obligation construction on footwear and textiles, which it mentioned will come into impact from January 1, 2022, however had left the efficient fee change undecided at the moment.

On the buyer aspect, he added, “It should result in an increase within the costs of clothes, thereby hurting consumption. On the federal government aspect, in the long term, it could result in many unorganised companies going out of the GST internet.”

RAI requested “the central and state governments and GST Council to rethink its choice to forestall an entire collapse of the sector and preserve an environment of hope and certainty.”

It additional mentioned, “A much more useful and cheap answer is to make the whole worth chain topic to a flat 5 % GST fee. This won’t solely resolve the inverted obligation construction anomaly but in addition give a fillip to the business.”

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