What is GST and how much is it for footwear in India: 12% Goods and Services Tax (GST) to be paid on footwear with a retail value not exceeding Rs 1000 per pair has been announced by the Central Board. Indirect Taxes and Customs (CBIC). From January 1, 2022, the Goods and Services Tax (GST) rate applicable on footwear will increase from 5% to 12%, which was earlier 5%.
At this time, a GST fee of 5% is applicable on the sale value of each pair up to Rs.1000. The industry will benefit from changes in rates as these changes will clarify the situation and end the problems created by the inverse duty structure.
The Conciliation Committee has suggested that the rate on footwear with a sales value of less than Rs 1,000 be increased from 5 per cent to 12 per cent. Currently, this rate is 5%. It is expected that this price adjustment will be applied from 01/01/2022 according to the current plans.
AAR Verdict In its decision on a petition filed by M/s Skechers South Asia Private Ltd, the Department of Customs (AAR) in Mumbai said that the 45th session of the GST Council has revised the GST rate for reversal. The structure of duty in shoes
The Conciliation Committee has suggested that the rate on footwear with a sales value of less than Rs 1,000 be increased from 5 per cent to 12 per cent. Currently, this rate is 5%. It is expected that this price adjustment will be applied from 01/01/2022 according to the current plans. Consequently, this judgment will remain in force until the GST rate is revised and implemented.
India’s Union Finance Minister Nirmala Sitharaman announced on Friday that the Goods and Services Tax (GST) Council has agreed to postpone the hike in the tax rate on textiles from 5 percent to 12 percent.
At a media briefing, Sitharaman said the GST meeting was convened under the “emergency clause” and the GST Council was merely having a quick meeting with an agenda.
He said that the Gujarat Finance Minister had asked for a postponement of the decision on the inversion of the tax structure, which was taken in the September council meeting.
From January 1, a 5-12 percent hike in the GST rate applicable to textiles was planned.
According to the Secretary of State, the GST Council has decided to postpone the adjustment of reverse duty on textiles and the matter will once again be presented to the ‘Rate Rationalization Panel’.
The council’s decision came after a number of states on Thursday took note of the higher tax rate imposed on textile items from January 1 and demanded a halt to the rate hike.
Andhra Pradesh Finance Minister Bogana Rajendranath Reddy told reporters after the 46th meeting of the GST Council chaired by Union Finance Minister Nirmala Sitharaman that several states said during the meeting that there was no clarity on the GST to be imposed on garments. . , clothing and textile products. Sitharaman is the Union Finance Minister.
The GST Council meeting has decided that the GST rate on textiles will remain unchanged at 5% and will not be increased to 12% as initially proposed.
The question of GST rate applicable to textiles will be referred to the committee responsible for tax rate rationalization, which will give its recommendation by the end of February: FM image tweeted by @DCjIvNTp2Z of Nirmala Sitharaman
December 31, 2021: “Several states, including Andhra Pradesh, requested the Council to withdraw the earlier decision to increase GST on textiles from the existing 5% to 12% from January 1, 2022.” Decision to increase GST on textiles from 5% to 12 % taken from January 1, 2022.
Even then, there was little clarification on the GST rate applicable on synthetic and natural textiles, as well as synthetic and natural fabrics such as nylon and cotton.
According to his claim, the council had no anticipation of a possible increase in refunds even if they were issued.
At this time, the tax rate on man-made fibers (MMF) is 18%, the tax rate on MMF yarn is 12% and the tax rate on textiles is 5%.
According to Reddy, who explained that this is because there are approximately 3 million handloom weavers in the state and a majority of them, Andhra Pradesh will be hit the hardest by the increase in Value Added Tax (VAT) on textiles. People wear cotton clothes as opposed to nylon clothes in other states.
Continuing the earlier statement, he said, “We have requested the council to take a judgment on the increase in GST on textiles after completing an in-depth investigation and examining the facts.
The GST Council meeting held on Friday is significant as it was held ahead of the Union Budget for 2022-23, which is expected to be presented in Parliament on February 1, 2022.
At the pre-budget meeting chaired by Union Finance Minister Nirmala Sitharaman, representatives from states like Gujarat, West Bengal, Delhi, Rajasthan and Tamil Nadu said they would not support the increase in the Goods and Services Tax (GST). . which currently applies to textiles from the current rate of 5 to 12 percent.
In an earlier meeting on September 17, the Council concluded that the reverse duty structure in the textile and footwear industries should be revised.
All footwear, regardless of price, will be subject to 12% Goods and Services Tax (GST) from January 1, 2022. In addition, all textile articles, excluding cotton, including ready-made garments, were subject to a tax. Twelve percent GST
Former West Bengal finance minister and current adviser to the state’s chief minister, Amit Mitra, had earlier asked the Center to reduce the proposed hike in textiles from 5 percent to 12 percent, saying it would lead to nearly 100,000 layoffs. textile units and the loss of 1.5 million jobs.
Telangana State Industries Minister KT Rama Rao has also argued in favor of reversing the government’s proposed decision to hike the GST rate.
The industry has also expressed its opposition to the tax hike from 5% to 10%, citing increased compliance costs, especially for the unorganized sector and small and medium enterprises, besides making clothing more expensive for individuals. becomes poor
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