Delhi: The Goods and Services Tax (GST) Council meeting chaired by Finance Minister Nirmala Sitharaman, today decided that the GST rate hike on textiles from 5 to 12 percent will be deferred. Many states have objected to the higher tax rates on textile products and have demanded that the rate hike be put on hold.
States like Gujarat, Delhi, Rajasthan, West Bengal, and Tamil Nadu have raised the matter and said that they are not in favor of a hike in GST rate which was supposed to come into effect from January 1, 2022. The issue was raised during pre-budget consultations by the finance minister with her counterparts from the states.
The 46th meeting of the GST Council is being held in the national capital today. This meeting holds significance as it is taking place ahead of the Union Budget for the upcoming fiscal year 2022-23. Industry bodies had also opposed the rise in tax from five percent, citing higher compliance costs.
Earlier this year, the Central Board of Indirect Taxes and Customs (CBIC) had announced the GST rate on garments, textiles, and footwear on the recommendations of the GST Council.