In its 45th meeting in Lucknow on September 17, the GST Council had decided to rectify the inverted duty structure for footwear and textiles. Accordingly the Central Board of Indirect Taxes and Customs (CBIC) has earlier announced that the GST rate on garments, textiles, and footwear would be raised from 5% to 12% with effect from January 1, 2022.
The textile and handloom industries are already suffering from the effects of the Covid pandemic, and any proposal to raise the tax would have been a death knell for the industry. All textiles and clothing would have become more expensive as a result of the proposed GST hike on the textile industry.
The 46th GST Council Meet chaired by the Union Finance Minister, Nirmala Sithraman has in a sigh of relief has announced that the existing rates in the textile sector will continue beyond 1st January, 2022.
The Press Release published after the above meet read “The GST Council’s 46th meeting was held today under the chairmanship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman.
The GST Council has recommended to defer the decision to change the rates in textiles recommended in the 45th GST Council meeting. Consequently, the existing rates in the textile sector would continue beyond 1st January, 2022.”
Accordingly the GST rate of 5 per cent will continue for sale value up to Rs 1,000 per piece in the case of apparel .
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
