GST Council slashes tax on manmade fiber, yarn
The GST Council is shaking up textile taxes.
Raw materials like manmade fiber and yarn now have a lower 5% GST, but if you're eyeing clothes over ₹2,500—think formal wear or wedding dresses—expect to pay more as their tax is set at 18%.
This mainly affects mid- and high-end apparel that's popular with the middle class.
Big win for MSMEs and local brands
Cutting GST on manmade fiber (from 18% to 5%) and yarn (from 12% to 5%) fixes old tax issues and gives a boost to micro, small, and medium businesses.
Plus, finished fabrics and any garment under ₹2,500 now get the same low rate—helping local brands stay competitive.
Textile groups want more clarity on garment taxes
Textile groups aren't thrilled about higher taxes on pricier clothes.
They're calling for one simple GST rate for all garments or at least raising the ₹2,500 limit so fewer items get hit by the hike.
There's also pressure to drop steep taxes on key raw materials like PTA and wood pulp before these changes kick in.