Wedding season blues: Garment makers caution against GST rate hike

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Subscribe to enjoy similar stories. New Delhi: An increase in the goods and services tax (GST) rate on certain readymade garments, currently being discussed by a ministerial panel, could be a dampener for the ongoing wedding season, textile manufacturers said. According to estimates from the Clothing Manufacturers Association of India (CMAI), bridal wear accounts for 10-12% of the total clothing market, underscoring its significance.

A group of ministers (GoM) led by Bihar deputy chief minister Samrat Chaudhary as part of the GST rate rationalization exercise is discussing whether to increase the rate for readymade garments priced above ₹1,500 while reducing the tax on cheaper ones. But the central government on Tuesday distanced itself from the proposal in an indication that the Centre and the ministerial panel may not be on the same page on it yet. Reuters reported on Tuesday that the panel on Monday decided to hike the tax on sin goods like aerated beverages, cigarettes, tobacco and related products to 35% from the present 28%, and to rationalize the rates on apparel, quoting an official.

Also read | GST Council’s December Meet: Waiver of levy on health, life insurance premiums on agenda As per the decision, readymade garments costing up to ₹1,500 would attract 5% GST, and those between ₹1,500 and ₹10,000 would attract 18%. Garments costing above ₹10,000 would attract 28% tax, the report said. India’s wedding industry has grown to an estimated $130 billion, making it the second-largest consumer sector after food and groceries, according to a recent report by Jefferies Group, a global investment banking firm.