House panels recommends rationalising GST on inputs of man-made textiles

The problem of inverted duty structure arises when the finished product is at a lower tax bracket compared to the input raw materials

The Committee on Labour, Textiles and Skill Development has endorsed the need to rationalise duties on raw material inputs to man-made textiles to correct the inverted duty structure, a year after a similar decision was reversed by the Goods and Services Tax (GST) Council.

In its report on the development of man-made fibre (MMF), the committee noted that the differential GST structure currently in place at various stages of MMF production is hindering the Indian textile and apparel industry.

“The committee is of the firm view that there is a need to rationalise duties on raw material inputs to man-made textiles. Further,