GST Council defers hike on textiles

The GST Council meeting has decided to retain the status quo on GST rate on textile to 5% and not raise it to 12%. The issue of GST rate on textile will be sent to the tax rate rationalization committee which will submit its report by February, said Finance Minister Nirmala Sitharaman.

New Delhi:The GST Council, on Friday, deferred its decision to hike GST rates on textiles from 5 percent to 12 percent, providing relief to textile sector. However, a final call over this matter will be taken in the next meeting, which is likely to be scheduled in February.

Finance Minister Nirmala Sitharaman said, "the GST Council meeting has decided to retain the status quo on GST rate on textile to 5% and not raise it to 12%. The issue of GST rate on textile will be sent to the tax rate rationalization committee which will submit its report by February." Sitharaman chaired the 46th meeting of the GST Council today here at Vigyan Bhawan. The GST rate hike on textiles was to come into effect from January 1, 2022.

Speaking to ETV Bharat, Himachal Pradesh Industries Minister Bikram Thakur said, "GST Council has decided to defer the hike in GST rate on textiles from 5% to 12%. The Council will review this matter in its next meeting in February 2022."

Dushyant Chautala, Deputy Chief Minister of Haryana informed that a sub-committee of 9 states has been constituted which will submit a report on this matter.

Meanwhile, Delhi's Deputy Chief Minister Manish Sisodia said, "Textile is not just a tax-paying industry. It provides jobs to 4 crore people, takes up the economy of our country. So before taking any decision, these factors should also be considered after consulting textile sector and NITI Aayog."

While some states, including Delhi and Haryana, also raised the issue of increased GST rates on footwear, no decision was being taken over that in today's meeting.

Rajasthan Minister Subhash Garg also raised the demand to continue the GST compensation grant for the next 5 years.

(With agency inputs)