• Notification Date: 25-11-2021
• Notification No: 55/2021-22

Govt Hikes GST From 5% To 12% w.e.f January 1, 2022 resulting in higher cost of Clothing, Apparel, Footwear

While the people of the country reel under soaring retail inflation, the government has increased the Goods and Services Tax (GST) on finished goods such as garments, footwear, and textiles from 5 per cent to 12 per cent, effective from January 1, 2022.

The Central Board of Indirect Taxes and Customs (CBIC) notified the hike on November 18.

GST rate on fabrics has been hiked to 12 per cent from 5 per cent from January 2022 and GST on the apparel of any value has also been increased to 12 per cent, compared to 5 per cent earlier with a cost of up to Rs 1,000 per piece.

Rates of textiles, including woven fabrics, synthetic yarn, pile fabrics, blankets, tents, accessories such as tablecloths or serviettes, rugs and tapestries, have increased from 5 per cent to 2 per cent.

The GST rates of footwear of any value have been hiked from 5 per cent (up to Rs 1,000/pair) to 12 per cent.

"Disappointed"

The Clothing Manufacturers Association of India (CMAI) said it was deeply disappointed with the government's decision to increase GST on apparel and footwear from January 1, 2022.

It said that the price hike will impact the industry as they are already facing inflationary pressure with raw material prices, especially yarn, packing material, and freight, soaring.

The high retail inflation has put immense pressure on people over the last couple of months, with prices of fuel soaring to an all-time high.

The rise in prices of oil and petrol has resulted in pushing up the cost of freight and transportation; adding up to the cost of finished goods. 

A report by the United Nations says that we are living in a time of decade-high inflation, where filling up plates is becoming a strenuous task like never before.