Considering the inherent nature of the textile industry, the Indian Texpreneurs Federation (ITF), the apex body of the industry, has suggested keeping the textile sector in the lowest slab of the proposed Goods and Services Tax (GST).

In view of past experience and the ability of the industry to absorb the components of taxation, it would be advisable to fix eight per cent optimum rate of tax for cotton textiles and 12 per cent for blended and manmade fibre-based products, ITF Secretary, Prabhu Dhamodaran said in a letter to Union Textile Minister Smriti Irani, in view of the ongoing process of finalisation of GST.

Because of the scattered and unorganised nature of micro and small units in textile sector, the high rate of tax would only encourage violation, which in turn will affect even the organised sector, making it lose markets, he claimed.

A reasonable and low rate will give a much needed fillip to the industry, whereby more and more investment will start pouring in, creating millions of jobs in the process, Prabhu said.

It was highly imperative that the entire chain of textile, right from cotton to yarn to fabrics and final apparel sector should be under GST levy so that the full benefit of end to end input credit and other benefits of a unique GST will be made available to the Industry, he said.

Any negative impact on textile industry will have huge impact on the entire value chain right from agriculture, Prabhu noted.