Two slabs under GST for the apparel sector has started adversely impacting the garment manufacturing and retail industries in India. This issue was raised by South India Garment Association (SIGA) in a letter to Union Finance Minister Arun Jaitley.
According to SIGA, the new tax regime that came into effect in July last year has forced the apparel manufacturers to go for under-capacity production. It feels that 5 per cent GST on transaction value below Rs. 1,000 and 12 per cent on a transaction of or above thousand values are unjustified.
The trade association further highlights that the textile segment has noted a 60 per cent decline, which is not a positive sign for the small- and medium-level enterprises.
In its letter to FM, SIGA further mentions that highest employment generating garment industry is now under pressure and is going through a tough phase. The sector known for creating highest jobs in urban and remote areas has been noticing a steep decline in production and the slowest retail. The decline in manufacturing has eventually increased the unemployment rate.
After demonetisation, the introduction of GST came as a shock to apparel traders. Post-GST, many cities, especially Surat in Gujarat, witnessed a widespread protest against the new rule.