Deferred decision to raise GST Rates in textiles from 5% to 12% w.e.f. 01.01.22

GSTN Deferred decision to raise textile GST Rates in textiles from 5% to 12% w.e.f. 01.01.2022

• The 46th GST Council meeting will be chaired by Hon'ble Finance Minister Smt. Nirmala Sitharaman today at 11 a.m. in Delhi, according to the Ministry of Finance. MOS Shri. Pankaj Chaudhary and Dr. Bhagwat Kishanrao Karad, as well as Finance Ministers of States and UTs and senior officers from the Union Government and States, will attend the meeting.
• GST Council's 46th meeting was held on December 31, 2021 under the chairmanship of Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman, according to a press release issued by the Ministry of Finance on December 31, 2021. The GST Council has suggested that the decision to adjust textile rates, which was recommended at the 45th GST Council meeting, be deferred. As a consequence, the current textile tariffs will be maintained beyond January 1, 2022.

RJA Observations:

• The GST Council has made a commendable decision to defer the increase in the GST rate on textiles from 5% to 12% w.e.f. January 1, 2022, as this will provide much-needed impetus and help to the textile sector, where a large number of small and medium-scale taxpayers were concerned about the recent hike in GST rates.
• GST Council decision is in the right direction and advisable for the Government to build confidence and consensus among traders before hiking GST rates in the future.
• Furthermore, if the Government intended to do away with the inverted duty structure for the textile sector, it should lower the GST rates on raw materials to 5% from 12% or 18%.
• Unfortunately, there is no delay on the GST rate on footwear, which would increase from 5% to 12% from January 1, 2022, & there is another unorganised industry with many small/ medium scale dealers and job prospects.
• This sector, too, required support and long-term viability, but the recent increase in GST rates will make footwear incredibly expensive for the common person. And, in order to ensure the long-term viability of the footwear industry, which generates a large number of jobs while also grappling with pricing and costing issues,
• Center government should have deferred the increase in the GST rate from 5% to 12% for this sector as well.

You may check GSTN Press Release at: https://www.pib.gov.in/PressReleasePage.aspx?PRID=1786581

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