Garment makers lobby against changing existing GST levies

Bengaluru: Clothing Manufacturers Association of India (CMAI), along with 14 leading garment trade associations from across India passed a resolution for submission to a group of ministers to abandon a proposal to modify goods and services tax (GST) rates in the garment sector, and retain the existing structure of 5 per cent and 12 per cent, the group said in a statement on Friday. 

The association cautioned that an increase in the GST will deeply harm industry growth, affordability and employment stability, leading to inflated prices, burdening price-sensitive consumers and slowing demand, especially for festive and wedding-related apparel. 

Other key decisions were budget recommendations to boost apparel trade and address industry needs such as a tailored production linked incentive (PLI) scheme for the sector.

One of the key issues with the current PLI structure is its significant investment demand which is more suited for the textile industry, backfiring on garment manufacturers in terms of their operational scale and investment capacity. 

Among other demands, introduction of an interest subsidy for the domestic garment sector was also put forth. While this sector does not require heavy capital investment, it requires assistance with interest costs. Despite the lack of incentives, it has shown significant growth, hence, a targeted assistance would further boost its potential.

The apparel industry has a retail market size of Rs 5.4 lakh crore and employs approximately 39 million people, including 16 million blue-collar jobs in domestic production.