NITMA urges GST council to fix inverted textile duty as US tariffs hit

With the onset of steep US tariffs from today, India’s textile sector faces renewed pressure on global competitiveness. The Northern India Textile Mills Association (NITMA) has called on the GST Council, meeting September 3–4, 2025, to implement a uniform 5 per cent GST across the man-made fibre (MMF) value chain.

NITMA president Sidharth Khanna warned that the current inverted duty structure—where polyester staple fibre (PSF) is taxed at 18 per cent and polyester spun yarn (PSY) at 12 per cent while fabric is at 5 per cent—is unworkable for spinners. He urged a cut in PSF and PSY rates to 5 per cent to align with fabric.

India’s textile sector is under strain as steep US tariffs take effect today.
The Northern India Textile Mills Association (NITMA) has urged the GST Council, meeting on September 3–4, 2025, to address the inverted duty structure in the man-made fibre value chain by reducing GST on polyester staple fibre (18 per cent) and polyester spun yarn (12 per cent) to 5 per cent, aligning with fabric.

According to Khanna, the present system burdens the industry with blocked working capital in GST refunds, unutilised input tax credits, administrative delays, loss of state SGST incentives, and unfair competition from imports.

“This is a critical moment for India’s textile sector. Decisive action to remove the inverted duty structure will not only counteract the impact of US tariffs but also unlock growth and investment across the MMF value chain, thereby making this event a blessing in disguise,” Khanna stressed.

Fibre2Fashion News Desk (KD)