Surat – The central government’s new GST 2.0 regime, effective from September 22, is set to directly benefit lower- and middle-income consumers. With a reduction in tax slabs on most daily-use and household products, prices are expected to fall. Nearly 90 percent of items previously falling under the 12 percent and 28 percent GST categories have now been shifted to the 5 percent and 18 percent slabs. This change is expected to ease household budgets and increase purchasing power.
In Surat’s textile industry, one of the city’s economic pillars, polyester yarn has witnessed a sharp reduction in GST, dropping from 12 percent to 5 percent. This 7 percent cut is expected to provide relief across the textile value chain, including weavers, processing units, job workers, and traders, ultimately benefiting end consumers. With lower input costs, fabrics are expected to become cheaper, enhancing affordability. However, industry experts note that it may take about a month for the impact to reach the market, as the process involves yarn production, fabric processing, and value addition before products are sold at revised rates.
While the textile sector at large gains from the revised GST structure, lehenga traders are facing fresh challenges. Under the earlier system, lehengas priced above Rs. 1,000 attracted 12 percent GST. Now, with GST 2.0, lehengas priced above Rs. 2,500 fall under the 18 percent slab. Since most lehengas are priced starting at Rs. 2,500, this effectively brings the entire segment under a higher tax bracket. Traders fear this will directly impact demand and increase costs for consumers, making lehengas less affordable in a market where price sensitivity plays a key role.
As per report, the mixed impact of GST 2.0 is evident in Surat. While consumers and large segments of the textile industry stand to benefit from reduced prices, specific sectors like lehenga manufacturing may struggle under the revised structure. The coming weeks will determine how these changes balance out across markets during the festive season.
