NITMA urges GST council to fix inverted textile duty as US tariffs hit

NITMA president Sidharth Khanna warned that the current inverted duty structure—where polyester staple fibre (PSF) is taxed at 18 per cent and polyester spun yarn (PSY) at 12 per cent while fabric is at 5 per cent—is unworkable for spinners. He urged a cut in PSF and PSY rates to 5 per cent to align with fabric.

According to Khanna, the present system burdens the industry with blocked working capital in GST refunds, unutilised input tax credits, administrative delays, loss of state SGST incentives, and unfair competition from imports.

“This is a critical moment for India’s textile sector. Decisive action to remove the inverted duty structure will not only counteract the impact of US tariffs but also unlock growth and investment across the MMF value chain, thereby making this event a blessing in disguise,” Khanna stressed.

ALCHEMPro News Desk (KD)