Ahead of the crucial GST Council meeting, the North India Textile Mills Association (NITMA) has demanded a uniform 5 per cent GST on polyester fibre, yarn, fabric, and garments. Following Prime Minister Narendra Modi’s announcement of rationalisation and rate cuts, the Council’s meeting scheduled for September 3–4, 2025, has become especially significant. NITMA raised the demand before Indian Finance Minister Nirmala Sitharaman, who chairs the Council.

North India Textile Mills Association (NITMA) has urged the GST Council to impose a uniform 5 per cent GST on polyester fibre, yarn, fabric, and garments to address the inverted duty structure.
Currently, polyester fibre attracts 18 per cent, yarn 12 per cent, and fabrics/garments 5 per cent GST.
NITMA warned that the imbalance threatens spinning viability, risking shutdowns and job losses.

Sidharth Khanna, president of NITMA, said 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 pointed out that polyester staple fibre (virgin and recycled) is taxed at 18 per cent, polyester staple yarn attracts 12 per cent GST, while manmade fabrics and garments priced up to ₹1,000 are taxed at 5 per cent GST.

Khanna added that taxing yarn at 5 per cent while fibre remains at 18 per cent creates a distortion that renders spinning operations financially unsustainable. If left uncorrected, this imbalance could trigger widespread unit shutdowns and large-scale job losses across the country.

“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 emphasised.

Fibre2Fashion News Desk (KUL)

However, the judges allowed the tariffs to stay in place as the case continues to be adjudicated in a lower court.

Most of President Donald Trump’s global tariffs are illegal, a US federal appeals court has ruled, saying Trump exceeded his authority in using emergency powers.
However, the judges allowed the tariffs to stay in place as the case continues to be adjudicated in a lower court.
Trump responded, saying his administration will use tariffs to benefit the nation with the help of the Supreme Court.

The ruling reaffirms an earlier ruling by the Court of International Trade.

“ALL TARIFFS ARE STILL IN EFFECT!,” Trump responded to the decision on Truth Social. He also called the court ‘Highly Partisan’, adding , “with the help of the United States Supreme Court, we will use [tariffs] to benefit our nation.”

“The retail industry is at the mercy of a tug-of-war between the courts, the administration and the congress when trying to plan and implement business operations and supply chain continuity. Tariffs have created significant disruption to the retail supply chain resulting in increased costs for retailers large and small,” National Retail Federation (NRF) vice president of supply chain and customs policy Jonathan Gold said in a statement.

“The ongoing instability threatens economic growth and will ultimately, and most certainly, result in higher prices for goods and services to be paid by American consumers. Retailers need certainty, and we look forward to the case being settled by the Supreme Court,” he added.

Meanwhile, due to reported US pressure on Mexico, the latter is set to raise duties on Chinese goods under its 2026 budget plan. The proposal, due next month, targets cars, textiles and plastics. Trump had earlier claimed that cheap Chinese goods slip into Mexico before heading north.

Fibre2Fashion News Desk (DS)