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Published
Nov 29, 2021
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FOHMA joins trade organisations pressuring government to scrap GST hike on apparel, textiles

Published
Nov 29, 2021

The Federation of Hosiery Manufacturers Association of India has joined numerous trade bodies to urge the Union Government to scrap its plan to raise goods and services tax on textiles and clothing from 5% to 12%.

January 1, 2022 could see new GST rates for the textile and apparel sector


FOHMA argued that the proposed GST rate hike on numerous categories of clothing and textiles will lead to significant price increases on items costing below Rs 1,000 ($13.32) which will negatively affect both the economy and less wealthy citizens. The government proposed the tax increase to come into effect on January 1, 2022 but the plan has been met with strong criticism from organisations including the Retailers Association of India, the Clothing Manufacturers Association of India, and now FOHMA. 
 
“What is more important is that more than 85% of India's total garment market is below the Rs 1,000 price level,” said FOHMA in a statement, the Press Trust of India reported. The organisation argued that the GST rate increase will disproportionately affect those who are less economically secure and are already struggling. 

“We from the FOHMA had made several representations to the government and GST Council- requesting them to defer the increase for the cause of the Indian hosiery and apparel industry,” said the trade body. “Unfortunately, our fervent requests have not been considered at all and it is extremely saddening.”
 
FOHMA urged the government not to put additional pressure on micro, small, and medium enterprises, which it says make up the most part of the manufacturing sector. Many textile and garment businesses are still recovering from the halt to the economy caused by the pandemic when, classed as ‘non-essential’ businesses, many fashion businesses had to cease operations for months. 

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