Sanath Shah

By Author: Impact of GST on textile
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Textile Industry in India has its roots since the centuries. One of the traditional industry where growth has been prosperous, The Textile industry still continues to be the most important and employed sector. Spreading its wings all over India. Changes have been seen with changes in technology, development, independence, polices, rules and regulations. There were times when textiles took a hype and also fell low. Like every industry even Textiles faced ups and downs, but governmental reforms helped to stabilize things. India is the second largest producer of fiber in the world and the major fiber produced is cotton. Other fibers produced in India include silk, jute, wool, and man-made fibers. 60% of the Indian Textile Industry is cotton based. The textile industry is a very important sector as all others depend on it, be it agriculture or service. Textile industry employees a large number of skilled and unskilled labors. It contributes towards the GDP as well as the economy.


Every change in the reforms of government affects the working of the industry, as every sector needs to fit themselves according to ...
... the framework of the policies. So will GST which stands for Goods & Service Tax. GST is going have a very huge impact on textiles. The total contribution and value of textile towards annual reports is going to increase with GST. Especially it will influence the cotton industry and its products like clothing for men, women, bedsheets, towels, etc.It is expected that the tax rate under GST would be higher than the current tax rate for the textile industry. Natural fibers (cotton, wool) which are currently exempt from tax, would be taxed under GST.GST rate at 12% is a very huge drawback. Cotton Fabric suppliers in India who had attracted 0% central excise duty will now have to face GST. Apparel manufactures in India and wholesalers say that the implementation of the goods and services tax has brought business to a standstill as their unregistered suppliers and customers try to stay out of the ambit of the new tax regime. Higher GST is going to make textiles expensive. However, there are a lot of benefits of GST as well. The 5 per cent GST rate on cotton fiber would benefit 20 million cotton farmers, while the same rate on readymade garments below Rs. 1,000 would benefit the common man.GST is also likely to consider the various fringe taxes like Octroi, entry tax, luxury tax etc. which would help reduce costs for manufacturers in the textile industry. Import of technology for manufacturing will give credits under GST. Before there was no credit given on the import of capital goods. Export of Textile goods is going to be boosted.

GST on Textile Fabrics.


Silk and Jute 0%
Cotton and Natural Fibre 5%
Manmade Fibre 18%
All categories of Yarn 5%
Manmade Yarn 18%
Fabric 5%
Apparels above 1000 INR 12%
Apparels below 1000 INR 5%

Textile products are likely to become more expensive, with the government fixing a higher rate on them under the Goods and Services Tax (GST), than the rates at which they are currently taxed. Well, GST has some pros and cons both but at the end, it will help our textiles industry to become more competitive in the world market, say the experts.

Author Bio:


For the past 3 years I have been writing informative and high quality articles on textilestock. In the above article have covered topics such asTextile Fabrics and Apparel manufactures in India.

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