Textile units that recycle PET and the manufacturers of polyester fibre will face inverted duty challenges with the revised GST rates as the entire textile industry is under 5% GST while the raw materials for the manmade 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 capacity. Majority of the recycled PET fibre is consumed by the textile sector. With PTA and MEG under the 18% slab, the industry will face challenges as refund will take time and MSMEs will face blockage of funds.
R.K. Vij, secretary general of the Polyester Textile Apparel Industry Association, said that while correcting the inverted duty structure of MMF-based polyester industry, the two main raw materials PTA and MEG remain at 18% GST “creating bigger inversion as fibre, filament, yarn are reduced from 12% to 5%.”
This is expected to block ₹2,000 crore to ₹3,000 crore working capital of the downstream textile industry as refund process will take time. About 80 % of PTA and MEG are consumed in MMF textiles such as virgin and recycled fibre, yarn, filament, fabrics and garments and 20% is used in PET bottles and polyester film packaging. Ultimately, PET bottles are also recycled and converted to recycled fibre / filament that is used in the textile industry.
Hence, the GST on the MMF industry’s raw materials should also be at 5 %, he said.
Published – September 16, 2025 08:57 pm IST
