BENGALURU: Following reports suggesting a possible revision of Goods and Services Tax (GST) rates for the garment and textile sector, the Karnataka Hosiery and Garment Association (KHAGA) has written to Union Finance Minister Nirmala Sitharaman, urging her to drop the proposal.
KHAGA, which represents the domestic garment and textile industry, highlighted what it called the economic and social impact the revision could have on manufacturing, pricing, and consumer demand.
The association raised concerns over the potential job losses the sector could face if GST rates are increased. The garment and textile industry, which employs a significant number of unskilled and semi-skilled workers, many of them women, is already under financial strain, KHAGA said, stating that any tax hike would worsen this situation, putting many livelihoods at risk.
The association also warned that revising GST rates could push consumers and businesses toward informal markets. This shift would harm legitimate retailers while benefiting illegal merchants, it said. KHAGA also emphasised the impact the proposed hike could have on the handloom industry, which employs over 2 million weavers.
“Higher tax rates would make handloom products unaffordable, affecting the government’s efforts to support traditional crafts,” the association said, pointing out that the wool industry, which supports around 1.2 million people directly, is already struggling due to cheap imports from China.
Ethnic garments, often purchased for weddings and celebrations, if categorised under luxury tax, will make them unaffordable for many, the forum said.
“This, in turn, would discourage consumption during cultural and festive events, further slowing the economy,” KHAGA president Prakash Bhojani said.