States demand roll back of increased GST on textile, footwear
Dec 30, 2021
New Delhi [India], December 30 : Several states including West Bengal, Rajasthan, Telangana, Tamil Nadu, Kerala and Punjab, on Thursday demanded that the proposed hike in GST on textiles and footwear from 5 per cent to 12 per cent should be rolled back.
GST Council in a meeting held on September 17 in Lucknow had decided to hike Goods and Services Tax on textile and footwear items from 5 per cent to 12 per cent effective from January 1, 2022.
Finance ministers of several states, who were in the national capital to participate in the pre-budget consultation, voiced their reservations on the increase in GST on textile and footwear.
Talking to reports Delhi Deputy Chief Minister Manish Sisodia said the decision to hike the GST on textile is not good for the industry and must be rolled back.
Subhash Garg, minister in Rajasthan Government, expressed hope that GST Council in its upcoming meeting would decide to roll back the increased taxes.
"I think GST Council has been called to roll back the decision to hike GST rates on textiles and footwear. I have also demanded the same," Garg said.
The 46th meeting of the GST Council is scheduled to take place under the chairmanship of Union Finance Minister Nirmala Sitharaman in New Delhi on December 31.
Ministers from West Bengal, Telangana, Tamil Nadu, Kerala and Punjab demanded the rollback of increased taxes on textiles and footwear.
In the September meeting the GST Council decided to increase GST on textile and footwear from 5 per cent to 12 per cent to correct the anomaly of inverted duty structure.
Currently, GST rate on manmade fibre stands at 18 per cent, manmade yarn is at 12 per cent and manmade fabrics and apparel of less than Rs.1000 is taxed at 5 per cent. Some chemicals used in textile industry are also taxed at 18 per cent.
Due to this duty structure, big manufacturers have been facing problems in getting refunds timely as the GST rate on final finished product is less than input raw material used in manufacturing.
