The Northern India Textile Mills Association (NITMA), based at PHD House, Sector-31/A, Chandigarh, has issued an urgent representation to the Union Finance Minister and the GST Council, ahead of the Council’s meeting scheduled for September 3–4, 2025. The association strongly appealed for a uniform 5% GST rate on Polyester Staple Fiber (PSF) and Polyester Spun Yarn (PSY) to address the long-pending issue of the inverted duty structure (IDS) in the Man-Made Fibre (MMF) value chain.
Currently, PSF (HSN 55032000) attracts 18% GST, and PSY (HSN 55092100 & 55092200) is taxed at 12%, whereas MMF fabrics and garments priced below ₹1,000 fall under the 5% GST slab. This mismatch has created significant financial strain for domestic spinners, while the cotton value chain continues to enjoy a simplified uniform 5% GST across all stages.
Mr. Sidharth Khanna, President of NITMA, emphasized that the anomaly makes spinning operations unviable, resulting in blocked working capital, higher interest costs, complex refund procedures, and increased burden on fresh investments. He also warned that imports gain an unfair advantage under this structure, directly undermining the government’s “Make in India” vision.
If corrective action is not taken, Mr. Khanna cautioned, the MMF industry could face widespread unit shutdowns, mass job losses, and disruption across the textile ecosystem. He stressed that reducing GST on PSF and PSY to 5% in line with fabrics will restore parity, unlock growth, and bring stability to the sector.
NITMA concluded by describing this as a “defining moment for India’s textile sector,” urging the GST Council to act decisively to neutralize the impact of IDS, counter global trade pressures, and turn challenges into opportunities for investment, employment, and resilience in the MMF value chain.