Indian industry seeks relief on polyester GST ahead of crucial meeting

The worldwide fabric and garments industry is controlled by manmade fiber, yet India’s fabric and garments market is still controlled by cotton fiber because of the irregular tax obligation framework on manmade fiber and its worth chain. The Indian industry has actually consistently highlighted the upside down obligation framework in the polyester worth chain.

Ahead of the crucial GST Council meeting, the North India Textile Mills Association (NITMA) has actually required a consistent 5 percent GST on polyester fiber, thread, textile, and garments. Following Prime Minister Narendra Modi’s statement of rationalisation and price cuts, the Council’s meeting arranged for September 3– 4, 2025, has actually come to be specifically considerable. NITMA increased the need prior to Indian Finance Minister Nirmala Sitharaman, that chairs the Council.

North India Textile Mills Association (NITMA) has actually advised the GST Council to enforce a consistent 5 percent GST on polyester fiber, thread, textile, and garments to deal with the upside down obligation framework. . Currently,polyester fiber brings in 18 percent, thread 12 percent, and fabrics/garments 5 percentGST . NITMA advised that the inequality endangers rotating stability, taking the chance of closures and task losses.

Celem Khanna, the head of state of NITMA stated in a letter: “Unlike the cotton value chain—which benefits from a uniform 5 per cent GST across all stages—the MMF segment continues to suffer from disparate tax rates that distort input-output parity and undermine domestic manufacturing viability.” He explained that polyester staple fiber (virgin and recycled) is strained at 18 percent, polyester staple thread brings in 12 percent GST, while manmade textiles and garments valued approximately 1,000 are strained at 5 percent GST.

Khanna included that straining thread at 5 percent while fiber stays at 18 percent produces a distortion that provides rotating procedures monetarily unsustainable. If left uncorrected, this inequality might cause prevalent system closures and massive task losses throughout the nation.

“This is a defining moment for India’s textile sector. Correcting the inverted duty structure will not only neutralise the impact of US tariffs but also unlock growth, investment, and resilience across the MMF value chain—turning challenge into opportunity. There should be a rationalised GST rate of 5 per cent across all stages of the polyester value chain,” he stressed.

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Fibre2Fashion News Desk ( KUL)

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