Karnataka Garment and Hosiery Industry Urges Uniform 5% GST on Apparel and Inclusion of Petroleum

The Karnataka garment and hosiery industry has called for major changes to the Goods and Service Tax ( GST ) Act, urging the GST Council to set a uniform 5% tax on all apparel and hosiery products and to include petroleum products under GST.

The industry leaders pointed out that the current multiple tax slabs on garments, along with petrol and diesel being outside GST, are causing confusion, increasing costs, and adding to inflation.

In a memorandum to Finance Minister NirmalaSitharaman, the group, led by trade activist Sajjan Raj Mehta,former president of the Karnataka Hosiery and Garment Association, noted that a single 5% GST rate would stabilise prices, simplify compliance, and reduce disputes over product classification.

The industry acknowledged concerns about potential revenue losses for states but suggested a phased implementation with temporary compensation until collections stabilise. The memorandum also stated the consumer impact, noting that garments are essential for all.

Mehta urged the Council to take a long-term approach that balances business growth, price stability, and state revenues as reported by Indian Express.

The request of the industry leaders is before the 56th GST Council meet which is scheduled on September 3 and 4 is expected to introduce major tax reforms. The current four tier structure 5%,12%,18% and 28% may be replaced with two main slabs i.e., 5% and 18%, while luxury and sin goods might attract 40 % GST.

Household products which are currently taxed at 12% may move to 5% and the household appliances and electronics which are taxed at 28 % currently may move down to 18%.

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