The Punjab Textile Merchant Association has requested Punjab Finance Minister Harpal Singh Cheema to oppose the proposed changes in the GST on garments in the upcoming GST Council meeting.

In a letter written to Cheema, the members of the association said there were pressing concerns of the textile and garment industry regarding the proposed changes in the GST rates, which were expected to be discussed at the upcoming GST Council meeting.

These proposals include an increase in the GST from 12 per cent to 18 per cent on garments priced between Rs 1,500 and Rs 10,000. The imposition of a 28 per cent GST on garments priced above Rs 10,000. The association members said they felt if these changes were implemented, they would have far-reaching repercussions on the garment sector, which is already under immense strain.

“As the Finance Minister of Punjab and a member of the GST Council, your role is crucial in safeguarding the interests of industries and workers in the state,” said the members, adding that raising the GST to 18 per cent for garments priced between Rs1,500 and Rs10,000 would make them unaffordable for middle-income consumers, resulting in reduced demand and slower sales. Additionally, imposing 28 per cent GST on garments above Rs 10,000 would discourage purchases in the segment, shrinking the market and pushing businesses into financial distress, they claimed.

The garment industry, largely composed of small and medium businesses, operates on tight profit margins. These businesses will struggle to absorb the increased tax burden, forcing many to shut down or lay off employees, they said.

The members further added that the textile and garment industry was a major employer in the state, providing jobs to lakhs of people, particularly in rural and semi-urban areas. Higher GST rates would lead to significant job losses, affecting families that rely on this sector for their livelihoods.

High GST rates will likely encourage under-invoicing and unbilled sales, leading to revenue losses for the government and fostering an unregulated market that undermines organised players.

The members also said that Punjab had a rich history of textile production and garment trading. The proposed changes would erode the competitiveness of the state’s businesses, causing long-term damage to its economy and industrial ecosystem.

“We have urged the state government to oppose these GST rate hikes during the GST Council meeting and advocate for maintaining the current rates of 12 per cent on garments. A status quo will ensure the sustainability of businesses, protect jobs, and prevent economic disruptions in Punjab and across India,” said Kanwaldeep Singh, president, Punjab Textile Merchants Association, Ludhiana.

Source: The Tribune