New Delhi : PHD Chambers of Commerce and Industry has welcomed the decision of GST Council to defer the hike in GST rate on textiles from 5 per cent to 12 per cent with effect from Jan 1 this year.
This will give much needed impetus and support to textile sector as large number of small and medium scale taxpayers are worried about the recent hike in GST rates, said Bimal Jain, Chair of IDT Committee PHDCCI.
“This decision of GST Council is in right direction and advisable to build confidence among traders before hiking GST rates in future.”, Jain said in a statement here.
The Goods and Services Tax Council, in its 46th meeting last week, decided to defer the proposed hike in tax rate for Textiles from 5 per cent to 12 per cent.
Soon after the meeting, Union Finance Minister Nirmala Sitharaman had announced that status quo will be maintained for the GST rate for textiles as of now and a Ministerial panel will review the rate structure by February 2022.
The emergency meeting of the GST Council was held on this issue in December 2021 as several representations had started trickling in. Besides, Gujarat Finance Minister had written a letter requesting to consider the GST hike in Textiles. Many States and Trade Associations had also expressed concerns about the proposed rate hike for Textiles from 5 per cent to 12 per cent.
In November 2021, the Finance Ministry had notified a uniform 12 per cent rate with effect from January 1 for manmade fibre, Yarn, fabrics and apparels.
At present, tax rate on manmade fibre, yarn and fabrics in 18 per cent, 12 per cent and 5 per cent respectively.
