GST rate for textile expected to be restored at 5 per cent
On receiving disapproval for correcting the inverted duty structure and inputs from industry associations, it is likely that the Union Ministry of Textiles has now decided to approach the GST secretariat seeking a restoration of the rate to 5%, as per CNBC-TV 18.
An official working on this development told the news agency stating, “The industry is of the view that textile fabric manufacturers or fabric weavers will see a significant rise in their working capital requirements due to the disparity, as raw material will be taxed at 5% and the finished product will be taxed at 12%. So, they are seeking a restoration of the old rate of 5 per cent.”
The source further said that the textile ministry doesn’t support the rate hike and is of the opinion that the industry needs relief.
“Any decision which creates more troubles for them needs to be flagged. So, our communication to the GST secretariat is very clear — maintain status quo on rates and make any change only after a detailed discussion with the ministry and the industry stakeholders,” the source added.
Cotton fabric manufacturers too are opposed to a hike and want GST to remain at 5 per cent.
The decision was taken by the GST Council, in its last meeting to correct the inverted tax structure by raising GST from 5 per cent to 12 per cent for several textiles and apparel (other than fibre and yarn) items from January 1, 2022.
An official announcement hasn’t been made yet but it is certain that a plea has been raised by the textile ministry and now the industry awaits for the resolution.
Source- Knn (knowledge & News Network)