GST Council decides to defer hike on textiles from 5% to 12%

GST Council has unanimously decided to defer hike in GST on textiles from 5 percent to 12 percent. The matter will be discussed again in the next Council meet in February 2022 for future roadmap.

The GST rate hike on textiles from 5 percent to 12 percent was to come into effect from January 1. Finance Minister Nirmala Sitharaman is scheduled to address a press briefing at 3 pm today regarding the matters discussed at the meeting, as per the finance ministry.

Earlier in the year, the Central Board of Indirect Taxes and Customs (CBIC), on the recommendations of the GST Council, announced that the GST rate on garments, textiles, and footwear would be raised from five per cent to 12 per cent with effect from January 1, 2022.

On December 30, several states flagged higher tax rate on textile products from January 1 and demanded that the rate hike be put on hold. In the pre-budget meeting chaired by Union Finance Minister Nirmala Sitharaman, states like Gujarat, West Bengal, Delhi, Rajasthan and Tamil Nadu said that they are not in favour of a hike in Goods and Services Tax (GST) rate on textiles to 12 per cent.

Delhi government supported the protest of traders against increase in goods and services tax on textile, and said it would raise the issue in GST council meeting, Deputy Chief Minister Manish Sisodia said on December 30.