Experts and businessmen believe, the government’s decision to increase GST on textile articles like yarn, fabric, cloth to 12 per cent from January 1, 2022 will lead to an increase in prices of garments and textile articles for end consumers. It will also hike the cost of investment for the businessmen, says NK Thamman, Tax Expert. Narinder Mittal, General Secretary, Ludhiana Business Forums opines, the GST increase will prove to be a big setback for the industry already facing severe fund crunch due to lockdowns.
Harish Kairpal, Finance Secretary, Knitwear Club, adds, the move will have serious repercussions on garment and textile manufacturers. Their cost of investment will rise steeply and retail consumers will also suffer as rates of garments and textile articles will be increased due to this tax difference.