Garment Trade Associations Unite to Urge GoM Against GST Rate Revision

Last updated: 13 January 2025


Quick Summary
Fifteen major garment trade associations in India, operating under the 'One Industry, One Voice' initiative, have joined forces to strongly oppose any proposed changes to the Goods and Services Tax (GST) rates for the sector. They are urging the Group of Ministers (GoM) to maintain the current 5% and 12% GST structure, warning that revisions could disrupt manufacturing, destabilise pricing, and lead to job losses for millions. The group has also put forward five key policy recommendations, including a sector-specific Production Linked Incentive (PLI) scheme and support for MSMEs, to foster sustainable growth.

In a landmark meeting, the Clothing Manufacturers Association of India (CMAI), along with 14 prominent garment trade associations across India, joined forces under the banner of "One Industry, One Voice" to address pressing challenges facing the garment sector.

The associations unanimously resolved to urge the Group of Ministers (GoM) to abandon its proposal to revise GST rates in the garment sector and retain the current structure of 5% and 12%.

Garment Trade Associations Unite to Urge GoM Against GST Rate Revision

Unified Opposition to GST Rate Revision

The primary focus of the meeting was the proposed GST rate revision, which the associations warned could destabilize the sector. Key concerns included:

  • Disruptions in manufacturing.
  • Pricing instability leading to weakened consumer demand.
  • Increased reliance on informal channels, particularly for festive and wedding apparel segments.
  • Potential job losses in a sector employing 39 million people, including 16 million in domestic production.

The associations stressed that retaining the existing GST rates is vital to ensuring affordability and maintaining stability in the industry.

Five Policy Recommendations for Sustainable Growth

The historic meeting also resulted in the development of five key policy recommendations aimed at fostering growth and stability in the garment sector:

  • Introduction of a Sector-Specific PLI Scheme: The associations proposed a Production Linked Incentive (PLI) scheme tailored to the garment sector. The existing PLI framework, designed for the textile industry, does not align with the investment capacities and operational scale of garment manufacturers. A dedicated PLI scheme would encourage broader participation and growth in the sector.
  • Protecting MSMEs in Insolvency Proceedings: To safeguard Micro, Small, and Medium Enterprises (MSMEs), the associations recommended classifying MSMEs as secured creditors during insolvency proceedings. This measure would ensure fair compensation in bankruptcy cases, boosting confidence and promoting trade.
  • Rectifying Section 43B(h) of the Income Tax Act: The associations called for eliminating or amending Section 43B(h), which currently disadvantages smaller manufacturers by incentivizing large buyers to source from bigger companies. A revised framework could level the playing field and support MSME growth.
  • Interest Subsidy for the Domestic Garment Sector: Unlike the export sector, the domestic garment industry does not benefit from interest subsidies. The associations recommended introducing targeted subsidies to address unique challenges and unlock growth potential.
  • Abandoning GST Rate Revisions: The associations reiterated their opposition to modifying the GST structure, emphasizing its detrimental impact on manufacturing, affordability, and employment.

CMAI's Leadership and Vision

CMAI President stated, "We are proud to have united under the Group of Associations to present a unified voice for the garment sector. Our comprehensive recommendations on GST, rising input costs, and policy reforms are essential for the sector's long-term growth and sustainability."

CMAI Chief Mentor echoed similar sentiments, noting, "Supportive policies are critical to unlocking the sector's full potential and translating positive consumer trends into tangible growth."

The Apparel Industry: A Pillar of the Indian Economy

Valued at Rs 5.4 lakh crore, the Indian apparel industry is a cornerstone of the economy, providing employment to millions and contributing significantly to GDP. Despite its resilience, the sector faces challenges that could hinder growth without targeted policy interventions.

With the government's support and the implementation of these recommendations, the apparel industry has the potential to unlock new opportunities, ensure sustainability, and drive India's economic progress.

FAQ :

The associations believe that revising GST rates could destabilise the sector by disrupting manufacturing, causing pricing instability, weakening consumer demand, and potentially leading to job losses among the 39 million people employed in the industry.

It is a collective effort by the Clothing Manufacturers Association of India (CMAI) and 14 other prominent garment trade associations to present a unified front and address critical issues facing the Indian garment sector.

The recommendations include introducing a sector-specific PLI scheme, protecting MSMEs in insolvency proceedings, rectifying Section 43B(h) of the Income Tax Act, providing interest subsidies for the domestic garment sector, and abandoning GST rate revisions.

A dedicated PLI scheme tailored for garment manufacturers would encourage broader participation and growth, as the existing textile industry PLI framework doesn't align with the investment capacities and operational scale of garment businesses.

The Indian apparel industry is valued at Rs 5.4 lakh crore, is a cornerstone of the economy, provides employment to millions, and contributes significantly to the GDP.




News posted by

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

Click here to Login and post comments    OR



More »


Popular News





CCI Pro



Company
29 June 2026
Accountant (Finance & Compliance)

TRIEYEZ

Kolkata

CA

View Details
Company
05 July 2026
Financial Controller

NovumLake Partners

Mumbai

CA

View Details
Company
ARTICLESHIP 16 July 2026
Article Assistant

Sahil Agarwal & Company

Mumbai

CA Inter

View Details
Company
Featured 18 July 2026
Senior Manager- Finance & Accounts

apricus india

Ahmedabad

CA

View Details
Company
21 July 2026
Chartered Accountant

Keshri & Associates

Thiruvananthapuram

CA

View Details
Company
ARTICLESHIP 07 July 2026
Articleship

Jawahar and Associates Chartered Accountants

Hyderabad

CA Inter

View Details
Company
06 July 2026
Accountant

Agarwal Anoop and Associates

Noida

CA Final

View Details
Company
13 July 2026
AVP / VP - PCG Advisory

Workforce Connect

Mumbai

MBA

View Details