A uniform rate of 5% under Goods and Services Tax (GST) for the cotton textile industry is expected to give a boost to the sector.
Consumers will not be affected much as the industry already had 12.5 % tax for branded garments, said the chairman of Southern India Mills’ Association M. Senthil Kumar. The new GST rate would bring substantial revenue and the move to broad-base the tax net would ensure compliance.
As no industry segment is exempted, the entire production system will become efficient, said Prabhu Damodaran of Indian Texpreneurs Federation. The uniform rate for cotton yarn and fabrics and for garments less than ₹1,000 will lead to growth, said Ujwal Lahoti, chief of CTEPC.