BENGALURU, INDIA: The South India Garments Association has submitted its third representation to Prime Minister Narendra Modi, urging the government to impose a single Goods and Services Tax (GST) slab on readymade garments, citing operational challenges and declining sales in the higher price segment.
The industry body highlighted that the current two-tier GST structure—5% for garments priced below Rs 2,500 and 18% for those above—creates a cascading effect and operational difficulties. The 13% gap between the two slabs poses challenges for manufacturers, wholesalers, and retailers, according to the representation dated October 24, 2025.
Goods sold to wholesalers or retailers below Rs 2,500 attract 5% GST, but when profit margins are added and the sale value crosses Rs 2,500, the tax rate jumps to 18%. The association warned that this price threshold could lead to "unwanted manipulation" by market players.
The representation noted that recent festive season sales showed positive impact across electronics, vehicles, and household commodities following GST reforms. However, garment sales below Rs 2,500 increased marginally by only 15%, while sales above Rs 2,500 dropped as price reductions remained unnoticeable to consumers.
"Consumer preferred purchases of house hold commodities in place of garments," the association stated, adding that the price drop visible in other categories was absent in higher-priced garments.
The association raised concerns about cheap imports from Vietnam, China, and other countries challenging the 'Make in India' and 'Vocal for Local' initiatives. The representation emphasized that locally made garments are "not luxury but necessity".
Pointing to inconsistencies in GST treatment, the association noted that all fabrics and sarees of any sale value fall under the 5% GST category, making the 18% rate on higher-priced apparel an "injustice to apparel industry". The body also highlighted that GST has been reduced on most essential and household commodities, but readymade garments have been "singled out".
In its representation, the association recommended removing the Rs 2,500 price bracket entirely and implementing a uniform GST rate on all garments to provide positive effect and boost locally manufactured apparel. This is the third such submission from the association, following earlier representations on September 6 and September 27, 2025.
The representation was signed by Anurag Singhla, President of the South India Garments Association.
