Textile models that recycle PET and the producers of polyester fibre will face inverted responsibility challenges with the revised GST charges as your entire textile business is below 5% GST whereas the raw materials for the artifical fibre (MMF) sector – Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG) and PET scrap – are at 18%.
According to B.P. Sultania, former president of the All India Recycled Fibre and Yarn Manufacturers Association, the PET bottle recycling sector has 1,25,000 tonne a month capability. Majority of the recycled PET fibre is consumed by the textile sector. With PTA and MEG below the 18% slab, the business will face challenges as refund will take time and MSMEs will face blockage of funds.
R.Okay. Vij, secretary basic of the Polyester Textile Apparel Industry Association, mentioned that whereas correcting the inverted responsibility construction of MMF-based polyester business, the 2 predominant raw materials PTA and MEG stay at 18% GST “creating bigger inversion as fibre, filament, yarn are reduced from 12% to 5%.”
This is predicted to dam ₹2,000 crore to ₹3,000 crore working capital of the downstream textile business as refund course of will take time. About 80 % of PTA and MEG are consumed in MMF textiles comparable to virgin and recycled fibre, yarn, filament, materials and clothes and 20% is utilized in PET bottles and polyester movie packaging. Ultimately, PET bottles are additionally recycled and transformed to recycled fibre / filament that’s used within the textile business.
Hence, the GST on the MMF business’s raw materials also needs to be at 5 %, he mentioned.
Published – September 16, 2025 08:57 pm IST