As the U.S. imposes steep tariffs on textiles, the Northern India Textile Mills Association (NITMA) has called on the GST Council to address the inverted duty structure affecting the man-made fiber (MMF) sector.
NITMA President Shri Sidharth Khanna has urged for a uniform 5% GST rate on Polyester Staple Fiber (Virgin & Recycled) and Polyester Spun Yarn, currently taxed at 18% and 12% respectively, while fabrics are taxed at 5%.
He warned that the disparity is creating multiple hurdles:
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Working capital blockage due to refund delays.
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Administrative challenges and compliance issues.
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Higher investment costs with unutilized input tax credit.
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Loss of state-level SGST incentives.
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Rising competition from imported finished goods that bypass such inefficiencies.
Highlighting the urgency, Mr. Khanna stated that aligning GST at 5% across the MMF value chain will counter the impact of U.S. tariffs, reduce systemic inefficiencies, and spur growth and investment in India’s textile industry.
