The GST council decides to postpone the migration on textiles from 5% to 12%, says report

GST Council Meeting: The GST council has unanimously decided to postpone the increase in GST on textiles from 5 percent to 12 percent, reports said Friday. The increase was to take effect on January 1, 2021. The decision was made at the 46th GST Council meeting, which was chaired by Nirmala Sitharaman on the day.

The matter will be discussed again at the next council meeting for future roadmap, sources told CNBC TV 18. The 46th meeting of the GST council started at. 11 on the day. Sitharaman is scheduled to hold a press briefing at 7 p.m. 15 on the issues discussed at the meeting, according to the Ministry of Finance.

The center had informed states of the GST council meeting on December 24, after which opposition-led governments had decided to raise the issue at the meeting.

According to a government announcement, all footwear, below 1000 Rs, should attract GST of 12 percent. On the other hand, all finished textiles, except those made of cotton, should also have a VAT of 12 per cent. Previously, these goods were sold at 5 percent VAT.

State governments and trading bodies had demanded a postponement of this increase, citing that a number of small businesses would be affected by this. They had also warned that the move would come as a trajectory for the poor, who would ultimately not be able to afford clothes, which is one of life’s basic needs.

Former West Bengal Finance Minister Amit Mitra has called on the Union’s finance minister to roll back a proposed increase in textiles from 5 per cent to 12 per cent, saying this would lead to the closure of around one lakh of textile units and 15 lakh job losses.

“Modi Govt will commit another BLUNDER on January 1. By raising GST on textiles, 5% to 12%, 15 MILLION JOBS WILL BE MISSED, AND 1 lakh units CLOSE. Modi ji, CALL FOR A GST COUNCIL MEETING NOW AND TURN DECISION BEFORE THE DAMOCLES SWORD FALLS OVER THE HEAD OF MILLIONS OF ORDINARY PEOPLE, “Mitra said in a tweet on December 26.

Telangana Industries Minister KT Rama Rao has also called on the Center to withdraw its proposed plan to increase GST rates. The industry has also opposed the five percent increase in taxes, citing higher compliance costs, particularly for the disorganized sector and MSMEs, in addition to making the poor man’s clothes expensive.

Trade organizations had called for a withdrawal of the center’s decision, saying the price change would drastically affect the poor. They said the new tax change will increase the prices of clothes, making the poor man face difficulties while buying clothes.

“The decision is extremely irrational and will affect the livelihoods of small producers, artisans and other sections,” the apex trader CAIT said in a letter to the government.

Many trade organizations across India have launched protests in light of the center’s decision, which has now been postponed.

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