The Northern India Textile Mills Association (NITMA) has issued a strong appeal to the GST Council to introduce a uniform 5% GST rate across key inputs in the man-made fiber (MMF) value chain, in light of the newly imposed U.S. tariffs—among the steepest in the region—which threaten India’s global competitiveness. Speaking ahead of the GST Council’s meeting scheduled for September 3–4, 2025, Shri Sidharth Khanna, President of NITMA, stressed the urgent need to eliminate the inverted duty structure currently burdening the MMF sector. He urged that GST rates on Polyester Staple Fiber (Virgin & Recycled) – HSN 55032000 and Polyester Spun Yarn – HSN 55092100 & 55092200 be rationalized to 5%. At present, Polyester Spun Yarn (PSY) is taxed at 12% and Polyester Staple Fiber (PSF) at 18%, while fabric attracts only 5% GST. Mr. Khanna cautioned that this disparity places immense pressure on the spinning industry, leading to:

• Significant blockage of working capital due to delayed GST refunds
• Administrative hurdles and increased scrutiny during refund claims
• Higher cost of new investment as input tax credit on capital goods remains unutilized
• Loss of SGST incentives from state governments
• Unfair competition from imported finished goods that bypass these inefficiencies Mr. Khanna concluded by stating, “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 U.S. tariffs but also unlock growth and investment across the MMF value chain, thereby ultimately making this event a blessing in disguise.”