Circulars

Cir No. 34 / G-2 / 20

With everyone’s attention being focused on the current crisis in the Industry caused by the spread of Coronavirus, it is perhaps possible to overlook a close escape the Industry had last week, which could have had extremely serious and long term implications, especially for our small and medium sized members.

It was reported that the GST Council had almost made up its mind to levy a uniform rate of 12% GST on the entire Textile Value chain, including Garments below Rs.1,000 which are currently at the 5% slab. In the already stressed market conditions, an increase of 7% in the prices of garments would have been a death blow to our members.

As soon as the news of this proposal reached CMAI, the Managing Committee immediately formed a task Group consisting of our senior most members, to reach out to as many members of the Council as we possibly could in the two days we had with us. Between the members of this task force we personally met several Council Members and some senior most National leaders, spoke to many others, as also the concerned Officers, and conveyed our earnest request not to increase the rates at this juncture.

CMAI is happy to inform you that as a result of our strenuous efforts, we were able to persuade the GST Council to defer their proposal to increase the GST rate to 12% to a future date. This proposed increase was part of the Council’s decision to have a uniform 12% rate across the entire Textile Industry, mainly to nullify the inverted duty structure currently prevalent in the MMF Sector.

Although the present this is only temporarily deferred, we are trying to persuade the Council to maintain the 5% rate on a long term basis.

Once again, strong and combined efforts of our senior members, has enabled us to prevent a decision which could have caused immense harm to our members.

This is for your information.

Yours sincerely,