GST restructuring may spur parallel economy, say companies
Two associations of manufacturers and retailers have said that the new goods and services tax (GST) slabs proposed for readymade garments will promote a parallel economy, defeating the very purpose of GST.
The Clothing Manufacturers Association of India (CMAI) and the Retailers Association of India (RAI) – the two bodies representing all major companies in textiles and organised retail sectors — will make presentations to the ministries of finance and textiles as well as to members of the GST Council in the next two days to apprise them of their views.
“The step is retrograde,” said Rahul Mehta, chief mentor, CMAI. “The move will set the textile and garment industry back and spur grey market. This will have a wide-ranging impact on all segments including the mid-segment as well as the wedding market, where garments are typically priced above Rs 10,000,” he said.
