Union Ministry of Textiles, after receiving inputs from industry associations, has now decided to approach the GST secretariat seeking restoration of the rate of Goods and Services Tax (GST) to 5 percent, CNBC-TV18 reported.
“The industry is of the view that textile fabric manufacturers or fabric weavers will see a significant rise in their working capital requirements due to the disparity, as raw material will be taxed at 5 percent and the finished product will be taxed at 12 percent. So, they are seeking a restoration of the old rate of percent,” the source was quoted as saying by the report.
Officials told that, “The textiles ministry is opposed to the rate hike and feels that the industry needs relief. Any decision which adds to their troubles needs to be flagged. So, our communication to the GST secretariat is very clear maintain status quo on rates and make any change only after a detailed discussion with the ministry and the industry stakeholders”.
The industry has been clamoring for a reversal as it feels the move will make its products costlier, which will impact the sale.
Earlier this month, Raymond Group CFO Amit Agarwal told ETCFO that gst rate hike will deter demand, and that the company has plans to pass on the full increase.