The GST Council, chaired by Finance minister and comprising state counterparts, has finalised the tax rates for textiles and apparel under the Goods and Services Tax (GST) regime that is to be rolled-out from July 1. The Council has made a distinction between various items and textiles and clothing would attract different rates. After the end of 15th meeting of GST, Council told media persons that all natural fibres including cotton, cotton yam, fabrics and readymade garments valued below ￡ 1000 have been classified under 5 per cent GST rate. Garments valued above ￡ 1000 have been classified under 12 per cent GST rate, while the synthetic or man-made fibres and synthetic yarn have been classified under 18 per cent GST rate. All other fibres and yarn would have a uniform 5 per cent rate. The Council decided to tax footwear below ￡ 500 at 5 per cent while those costing more would be taxed at 18 per cent. No tax would be levied on silk and jute fibre. Prominent textile and apparel industry bodies have welcomed the rates announced for the industry by the Goods and Services Tax (GST) Council. The rate of 5 per cent for cotton textiles is very progressive and will lead to the growth and development of the entire value chain. The low rates will not cast any additional burden on the sector and will ensure that India regains its competitiveness in the textiles sector in world markets. 5 per cent GST rate on cotton fibre would sustain the competitiveness of over 20 million cotton farmers as this rate across the value chain would enable the cotton textile industry to remain globally competitive, achieve substantial growth rate and increase cotton fibre consumption and thereby increase the earnings of the farmers. It would help the predominantly cotton based textile industry to grow and also increase exports.
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