The GST Council on Friday decided to defer the hike in the rate of goods and services tax (GST) on textiles from 5 per cent to 12 per cent, Finance Minister Nirmala Sitharaman announced.
The GST rate hike on textiles from 5 per cent to 12 per cent was to come into effect from January 1, 2022.
The meeting was called under emergency provision, the minister informed in the press conference.
Sitharaman said that the meeting was called after the finance minister of Gujarat requested for deferment of the decision taken in the Council’s meeting in September 2021 on the inversion of tax structure.
“The September 2021 decision was taken more in the process of correcting inversion in the tax structure,” she said.
Since 2019, GST Council has considered such correction in the inverted duty structure in approximately 10 items, Sitharaman said.
The move by the GST Council comes after some states and industry bodies opposed the rise in tax from 5 per cent.
Last week, Amit Mitra, the Principal Chief Advisor to West Bengal Chief Minister, had urged Union FM Nirmala Sitharaman to roll back the proposed hike. He said the new rate structure would cause closure of around 1 lakh textile units and losses of 15 lakh jobs nationally.