22nd September 2021, Mumbai:
Inverted duty charges, likely to be levied by the GST council on readymade clothes from January 01, 2022, will increase garment prices by 7 per cent. As per the Clothes Manufacturers Association of India (CMAI), a change in duty charges will raise the cost of garments above Rs 1,000 per piece.
The Council also plans to increase GST for readymade garments costing less than Rs 1,000 to 12 per cent. The reason behind this surge is the GST of raw materials such as fabric or yarn that is fixed at the rate of 12 percent at the present which is a matter of concern. Rahul Mehta, Former Chairman and Mentor, CMAI adds the government should reduce the high GST rates on raw materials if it plans to fix the inverted duty structure. The levy of inverted duty charges will impact manufacturers’ business greatly.