• Notification Date: 11-02-2022
• Notification No: N/A

CAIT appeals to the Centre to withdraw GST on the Textile Industry

In the GST Council meeting 2021, it was decided that the hike in the GST rate on the textile industry from 5 to 12% will remain postponed for the time being. The Confederation of All India Traders (CAIT) appealed to the Union Finance Minister Nirmala Sitharaman to withdraw the additional GST rate imposed on the textile industry. The GST Council passed on the matter to the tax rate rationalization committee. The committee will submit the final decision report by February.

The current rate of tax imposed on the textile industry is 5%. The National President of CAIT, B.C. Bhartia and the Secretary-General, Praveen Khandelwal commented that they have appealed to Finance Minister Nirmala Sitharaman to withdraw the proposed rate of 12% GST on the textile. They added that the excess 7% of GST will put excessive pressure on the consumers of India. The hike will majorly affect the traders by blocking the capital in the form of refunds.

Previously, there was no tax applicable to the textile or fabric industry. CAIT further added that the enhanced GST rate will negatively impact small businesses. This will lead to the evasion of taxes and the offenders will take illicit advantage of the loopholes in the GST framework. The application of GST to the textile industry was a major setback in itself for the businesses. The new ruling of the government to increase the tax has led to several protests under the CAIT. The rate of GST in the textile industry is being demanded to be kept at 5%.