The proposed change in the rate from the existing 5 per cent to 12 per cent is going to significantly increase the prices of apparel now costing below Rs 1,000, officials of the Federation of Hosiery Manufacturers Association of India (FOHMA) said.

Expressing concern over the Centre’s recent notification on higher GST rates for several apparel items from January 1 next, a prominent hosiery manufacturers’ association has sought its deferment, saying it will impact the common man and those in the MSME sector.

The proposed change in the rate from the existing 5 per cent to 12 per cent is going to significantly increase the prices of apparel now costing below Rs 1,000, officials of the Federation of Hosiery Manufacturers Association of India (FOHMA) said.

The move will impact the weaker section of society, who mostly buy clothes priced below Rs.1,000. "What is more important is that more than 85 per cent of India’s total garment market is below the Rs. 1,000 price level," they said.

Additionally, the proposed merger of 12 per cent and 18 per cent slabs to a single rate will result in a staggering increase of 30 per cent in the GST rate for garments.

"We from the FOHMA had made several representations to the government and GST Council requesting them to defer the increase for the cause of the Indian hosiery and apparel industry. Unfortunately, our fervent requests have not been considered at all and it is extremely saddening," the association officials said.

In the industry, where most of the units are in the MSME sector, increasing the rate to 12 per cent for fabrics will hit the people associated with the sector as they are already stretched for resources and financial capital, the officials said.

Any further pressure on the small industries would be uncalled for at this juncture, the FOHMA said.