NEW DELHI: Following opposition from traders and several states, the GST Council on Friday decided not to effect the tax rate hike on textiles from 5% to 12% for now.
The ministers’ panel looking into rate rationalisation will now take the call.
“We will retain the status quo and not go to 12% from 5%, in the case of textile,” Finance Minister Nirmala Sitharaman told reporters after the meeting.
Sitharaman added that the Council was of opinion that this is not the right time to do it as the textile sector is struggling to recover from the pandemic shock.
However, the Council did not give similar concession to footwear. At its meeting in September, the Council had decided to rectify the inverted duty structure for footwear and textiles.
Subsequently, the rate for the two items for any value was raised to 12%, effective January 1, 2022.
Earlier the GST rate was 5% for sale value up to Rs 1,000 per piece in the case of apparels and per pair in the case of footwear. At a pre-Budget meeting between on Thursday, Tamil Nadu Finance Minister P Thiagarajan had asked if the rate hike can be delayed. Delhi, Rajasthan, Telangana and Bengal, too, opposed the move.