Manmade fiber and synthetic yarn would have an inverted duty structure problem as they would be levied Goods and Services Tax (GST) at 18 per cent. The industry feels keeping the rates of key inputs at a higher level will affect the competitiveness of small and medium synthetic textile manufacturers.

The opinion is that India is already suffering a huge competitive disadvantage in the global textile market as the manmade fiber based textile products are attracting higher rates of import duty. Keeping the GST rates at this level would cripple the hundreds of small and medium synthetic textile manufacturers.

These manufacturers say the rates of manmade fiber products should be brought down to 12 per cent.

There is apprehension that the high rates announced for manmade fabrics and yarns, dyeing and printing units, embroidery items at 18 per cent can lead to an increase in input costs and can adversely affect the entire textile value chain.

The GST of five per cent on fabrics is thought to be quite favorable for the industry.

Mills in southern India say textile jobs should be exempt from service tax as this would benefit the predominantly decentralized and medium and small scale power loom, knitting, processing and garmenting sectors.