Saturday, 04 December 2021

GST on footwear, textiles, and apparel rise up from 5% to 12%, from 1st January

GST on footwear, textiles, and apparel up from 5% to 12%, from 1st January

The government has increased the (GST) goods and services tax applicable on finished products such as footwear, textiles, and apparel from 5 to 12 percent, effective 1st January 2022.

CBIC notified this on 18th November.

GST rate on fabrics has been increased to 12 percent from 5 percent from January 2022, and GST on the apparel of any value has been rising to 12 percent, compared to earlier when pieces priced up to Rs 1,000 were subject to 5 percent GST.

Rates for textiles (including woven fabrics, synthetic yarn, pile fabrics, blankets, tents, accessories such as tablecloths or serviettes, rugs, and tapestries has also been increased from 5 percent to 12 percent, and that of footwear of any value has been an increase from 5 percent (up to Rs 1,000/pair) to 12 percent.

GST on footwear textiles and apparel up from 5 to 12 from 1st January 1unsplash image

Read More: Surat and Ahmedabad becoming fake GST billing center: Govt

The Clothing Manufacturers Association of India (CMAI) on 19th November said it was "deeply disappointment" at the government's decision to hike GST rates on apparel, reports said.

Rajesh Masand, president, CMAI said in the statement, reported.

"CMAI, along with associations and trade bodies from all over India have been vigorously representing to the government and GST Council not to implement this change, and it is indeed extremely disappointing that the Council has chosen not to heed their plea,"

The statement added that the impact of this cost increase would be pronounced as the Industry is facing inflationary headwinds, with prices of raw materials, especially yarn, packing material, and freight on an upswing. "The market was expected to see a 15-20 percent price increase in apparel cost in the coming season even without the GST rate increase. The industry body added that over 80 percent of India's apparel market comprises garments priced below Rs 1,000.

Masand said

"CMAI believes this measure is completely misplaced, as it is reportedly introduced primarily to address the Inverted Duty Structure existing in a section of the Industry – and this sector is not more than 15 percent of the total Industry. To resolve a problem which exists in 15 percent of the Industry therefore, this move will adversely impact 85 percent of the total Industry,"

The hike was reportedly based on the recommendations of the GST Council.

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