The Central Board of Indirect Taxes and Customs (CBIC) has notified the increase in the goods and services tax (GST) of finished products such as apparel, textiles and footwear from 5 percent to 12 percent which will be in effect from January, 2022.
For fabrics, the GST rate has been increased to 12 percent from 5 percent, while for GST on apparel of any value has been increased to 12 percent which earlier depended on the pieces priced, wherein up to INR 1,000 were subject to 5 percent GST.
The 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.
Lastly for footwear of any value has been hiked from 5 percent (up to Rs 1,000/pair) to 12 percent.
“There’s definitely a section that will be hurt from this hike and a section that will benefit as it addresses the inverted duty structure. However, the MSMEs who are apparel manufacturers will suffer badly,” said Dr. Animesh Saxena- Manging Director Neetee Apparels- a leading garment exporter and President of Federation of Indian Micro and Small & Medium Enterprises (FISME).
According to reports the Clothing Manufacturers Association of India (CMAI) had expressed its disappointed and their President, Rajesh Masand, said that associations and trade bodies across India were representing their viewpoint to not increase the GST, but the GST Council did not consider their plea.
It is to note that the hike was reportedly based on the recommendations of the GST Council.
Source : KNN
