GST rate cut impact: Synthetic textiles to be 5-7% cheaper from August

GST Council allows input credit, to reduce effective rate on fabric to 5% now from 12% earlier

Synthetic textile manufacturers are planning to cut the prices of their products by at least 5 per cent from August following the government's decision to reduce the effective GST (goods and services tax) rate on its raw materials by 7 per cent from July 27.

The GST Council in its meeting held on Saturday had decided to allow input credit on manmade fabric equivalent to 7 per cent. This will provide a level-playing field to synthetic textile manufacturers through a uniform tax rate on the entire value chain. The move will cut effective GST on manmade (synthetic) fabric to 5