With new GST rule changes, here’s what is going to be costlier from Jan 1
The year 2022 is set to bring with it a host of tax rate changes on consumer goods and procedural changes on the payment of Goods and Services Tax (GST). From the tax burden shifting to e-commerce websites to consumer goods like footwear, clothes and textiles getting more expensive, here are all the GST tax norms that are changing from January 1, 2022.
- Clothes, footwear to get more expensive
Finished goods such as apparel, footwear and textiles are set to get more expensive from January 1, 2022 with the Union government increasing the GST on such items from 5% to 12%. The GST rate on apparel costing up to Rs 1,000 per piece has been hiked from 5% to 12%. Rates of textiles, including woven fabrics, synthetic yarn, blankets, tents as well as accessories such as tablecloths or serviettes, have also been increased from 5% to 12%. The GST rate on footwear (costing up to Rs 1,000 per pair) has also been hiked from 5% to 12%.
The Central Board of Indirect Taxes and Customs (CBIC) had notified the hike on November 18. Expressing disappointment at the government's decision to increase the GST on apparel, the Clothing Manufacturers Association of India (CMAI) said that the hike will impact the industry with inflationary pressure weighing heavily on raw material prices, especially yarn, packing material and freight.
- Auto rides booked via Ola, Uber to get dearer
Auto rickshaw rides booked through app aggregators like Ola and Uber are also set to get more expensive in the new year. The Union government had declared that it will levy a 5% GST on auto rides booked online from January 1, ending an existing exemption. Auto rides taken from the streets will continue to be GST-free.
An Uber spokesperson said that while the company appreciated the need to collect revenues, it urged the government to reconsider this tax, which will end up affecting the earnings of auto drivers as well as the government’s digitisation agenda.
- Tax burden shifting to e-commerce companies
From January 1, food delivery apps will have to collect and deposit 5% GST with the government, in place of restaurants, for deliveries made by them. This is a procedural change, there will be no extra tax burden on the end consumer.
Earlier, the GST was payable by restaurants. Now, instead of restaurants, the tax will be payable by aggregators like Zomato and Swiggy, which will also prevent revenue leakage, the government had said.
SOURCE: The News Minute
https://www.thenewsminute.com/article/new-gst-rule-changes-here-s-what-going-be-costlier-jan-1-159191
