GST Hike On Textiles From 5% To 12% Deferred Amid Objections: Sources

Earlier in the year, the Central Board of Indirect Taxes and Customs had announced that the GST rate on garments, textiles, and footwear would be raised from five per cent to 12 per cent with effect from January 1, 2022.

The goods and services tax (GST) Council meeting, chaired by Finance Minister Nirmala Sitharaman, today decided that the rate hike on textiles from five per cent to 12 per cent will be deferred, amid objections from states and the industry, sources told NDTV.

Many states had objected to the higher tax rate on textile products and demanded that the rate hike be put on hold. The matter was raised by states like Gujarat, West Bengal, Delhi, Rajasthan, and Tamil Nadu. The states said that they are not in favour of a hike in GST rate on textiles to 12 per cent, from five per cent currently, with effect from January 1, 2022.

The issue came up for discussion during finance minister Nirmala Sitharaman's pre-budget consultations with her counterparts from the states.

Delhi Deputy Chief Minister Manish Sisodia said the Delhi Government will protest against the proposed tax hike on textiles. "The government won't let the common man's voice be suppressed," Sisodia said.