Hike in GST garments rate revision evokes MSMEs sharp reaction
30th October 2021, Mumbai:
As reported earlier 'The Goods and Services Tax (GST) Council' proposed to hike the rates uniformly from 5 percent to 12 percent for garments agonistic of their pricing & categories.
The step has widely been understood at the granular level will hurt & hit the MSME sector as the increased GST rates will only cause deep disruption by creating bottlenecks for the industry which is ravaged by the second wave of covid-19 & still is in the recovering mode only.
According to trade expert, Dr. Animesh Saxena- Managing Director, Neetee Apparels- a prominent garment exporter in NCR-Capital region and President of Federation of Indian Micro and Small & Medium Enterprises (FISME) the measure is retrograde & is quite definitely going to undermine the garment industry recovery as it drives prices up.
However he is taking a sympathetic view both on the industry & the authorities stand on proposed revision in GST taxes “Understandably, It is owing to the input cost pressures out of key raw-material yarn which presently has a GST of 18 percent with no recovery in the supply chain, and as a course correction to that the government is forced to contemplate/ look into these impending changes.,” explained Saxena.
He also avers categorically, “Government needs to sooner than later needs to seriously address the disruptive inverted duty structure and needless to state work urgently on the refund mechanism to help decisive trade recovery,”
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