The Goods and Services Tax (GST) Council meeting chaired by Finance Minister Nirmala Sitharaman on December 31 decided to postpone the increase in textile tax rate from 5% to 12% due to opposition from states and industries. %.
Previously, many states in India opposed increasing tax rates on textile products and requested a suspension of tax increases. The matter was raised by states such as Gujarat, West Bengal, Delhi, Rajasthan and Tamil Nadu. These states said they do not support an increase in the GST rate on textiles from the current 5% to 12% from January 1, 2022. ,
Manish Sisodia, Deputy Chief Minister of Delhi, India, said that the idea of increasing excise tax on textiles is not beneficial to the people and should be cancelled. If a common man buys clothes for Rs 1,000, he has to pay Rs 120 as GST. On Thursday (December 30), Sisodia, the minister in charge of the Delhi government’s finance department, tweeted: “I will demand to keep taxes on textiles low at the GST meeting tomorrow.”
P Thiaga Rajan, finance minister of the Indian state of Tamil Nadu, said: “This is an important agenda (of Friday’s council meeting). It is an agenda that has been brought up by many states. In the agenda item , it says it was brought by Gujarat, but I know many states have brought it… It . . . (the move to increase the GST rate) should be stopped.”
“We will push for a complete reversal… We have received several representations from the industry. This industry is a big pillar and there are a large number of small, medium and micro enterprises that will be affected,” he added.
Amit Mitra, chief adviser to the West Bengal chief minister, had urged Union Finance Minister Nirmala Sitharaman to cancel the proposed hike in tax rates.
The Goods and Services Tax Council of India is the governing body responsible for managing and guiding every step of the implementation of the Goods and Services Tax in the country. Recently, it had made several proposals to revise the goods and services tax rates to correct the inverted tax structure and other anomalies.
Currently, India levies a 5% tax on sales of up to Rs 1,000 per piece and the GST Council’s proposal to increase the textile tax rate from 5% to 12% will affect a large number of small traders engaged in the trade. In the textile sector, even consumers will be forced to pay exorbitant charges if the rule is implemented.
The Indian textile industry opposed the proposal, saying the decision could have a negative impact, leading to lower demand and economic recession.
India’s Finance Minister told a press conference that the meeting was held under emergency circumstances. Sitharaman said the meeting was convened after the finance minister of Gujarat requested postponement of the decision on tax structure inversion taken at the September 2021 council meeting.
</p
