Calling for major reforms in the Goods and Services Tax (GST) structure, the Karnataka garment and hosiery sector has urged the GST Council to fix a uniform 5% rate on apparel and hosiery products and to bring petroleum products under the tax framework. Industry representatives say the current system of multiple slabs on garments and the exclusion of petrol and diesel from GST are creating confusion, raising costs, and adding to inflationary pressures on consumers.
In a memorandum submitted to Finance Minister Nirmala Sitharaman, the group said that a single GST rate of 5% across garments and hosiery would reduce price volatility, improve compliance, and eliminate disputes over classification.
The representation, led by trade activist and former president of the Karnataka Hosiery and Garment Association, further pressed for the inclusion of petroleum products under GST, noting that their continued exclusion has resulted in cascading taxes and higher input costs across industries.
He argued that sectors such as textiles, where transportation forms a major cost component, would directly benefit if fuel came under the GST net. “This step would enhance transparency, reduce overall costs, and also remove disparities in fuel prices across states,” he said.
At the same time, the association acknowledged the apprehensions of states over possible revenue loss. However, it pointed out that a rationalised tax structure with a broader base would eventually strengthen collections. To address the interim shortfall, the group suggested a phased transition with compensation support for states until revenues stabilise.
Underscoring the consumer impact, the memorandum highlighted that garments are an essential commodity for every section of society. Rationalisation of GST, it said, would help contain price rise, boost domestic demand, support local manufacturing, and make Indian textiles more competitive globally.
“The Council must adopt a forward-looking approach that ensures ease of doing business, price stability and industry growth, while safeguarding state revenues,” he, in the letter, said.
