Punjab Textile Merchants Urge State Finance Minister To Oppose Proposed GST Rate Hikes

Chandigarh, Dec 5 (KNN) The Punjab Textile Merchant Association has formally appealed to Finance Minister Harpal Singh Cheema to challenge proposed Goods and Services Tax (GST) changes targeting the garment sector during the upcoming GST Council meeting. 

In a comprehensive letter, association members detailed their significant concerns about potential tax rate modifications that could substantially impact the state's textile and garment industries.

The proposed GST changes include a substantial increase from 12 percent to 18 percent on garments priced between Rs 1,500 and Rs 10,000, and an even more dramatic 28 percent GST rate for garments exceeding Rs 10,000. 

Association members warn that such changes would have far-reaching and potentially devastating consequences for an already challenged sector.

Representatives argue that these tax increases would disproportionately affect middle-income consumers, potentially reducing demand and sales across multiple price segments. 

Small and medium-sized businesses, which form the backbone of the garment industry and operate on historically slim profit margins, would be particularly vulnerable to these proposed changes.

The textile and garment sector represents a critical employment ecosystem in Punjab, providing livelihoods for thousands of workers, especially in rural and semi-urban regions. 

Industry leaders caution that higher GST rates could trigger widespread job losses and economic instability, potentially disrupting the economic well-being of numerous families dependent on this sector.

Moreover, the association warns that aggressive tax rate hikes might inadvertently encourage unethical practices such as under-invoicing and unbilled sales, potentially leading to government revenue losses and creating an unregulated market environment that disadvantages organised businesses.

Kanwaldeep Singh, President, Punjab Textile Merchants Association in Ludhiana, emphasised, "We are calling on the state government to staunchly oppose these proposed GST rate increases during the upcoming council meeting and advocate for maintaining the current 12 percent rate on garments.” 

He further added, “Preserving the status quo is crucial for ensuring business sustainability, protecting employment, and preventing economic disruption across Punjab and India."

The association's letter underscores Punjab's rich textile production heritage and argues that the proposed GST modifications could critically undermine the state's industrial competitiveness, potentially causing long-term economic repercussions.

As the GST Council prepares for its meeting, the textile merchants' appeal highlights the delicate balance between revenue generation and industrial sustainability, placing significant pressure on policymakers to carefully consider the broader economic implications of proposed tax changes.

(KNN Bureau)