The textile and fertilizer industries are poised to gain significantly from the upcoming GST 2.0 rationalisation. The fitment committee has suggested sharp rate cuts across critical categories, aimed at resolving inverted duty structures and easing costs for end-users.
In the textile sector, categories such as woven fabrics of cotton, man-made fibres, and wool, along with apparel, hosiery, and certain blended textiles, are under consideration for a reduced 5% GST rate, down from the existing higher brackets.
Industry representatives have long argued that higher rates on inputs compared to finished garments block working capital and hurt competitiveness. Lowering GST will not only provide relief to weavers, powerlooms, and garment makers but also make Indian exports more attractive in global markets.
On the fertilizer front, the Council is weighing a cut from 12% to 5% on key inputs including urea, diammonium phosphate (DAP), muriate of potash (MOP), single super phosphate (SSP), and complex fertilizers. Reducing GST on these essential farm inputs will bring down production costs, reduce subsidy outlays, and make fertilizers more affordable for farmers. It also addresses the long-standing issue of inverted duties, where raw materials are taxed higher rate than the final product.
The final decision will be taken by the GST Council at its meeting on September 3 and 4 in New Delhi.
