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CAIT wants GST hike on textiles to be deferred, writes to FM Sitharaman

It has also demanded that the deadline for filing income-tax returns should also be extended

December 27, 2021 / 07:11 PM IST
 (Representational image)

(Representational image)

The Confederation of All India Traders (CAIT) on December 27 requested Finance Minister Nirmala Sitharaman to defer the hike in the good and services tax (GST) on textiles that kicks in from January 1, 2022.

The government in November notified an increase in GST on natural fibre products from 5 percent to 12 percent, including apparels in the lower tax bracket with effect from January 1, 2022. The decision was taken at the last GST Council Meet in September this year.

The traders' body called for a task force, headed by the Central Board of Indirect Taxes chairman and comprising representatives of the industry as well as senior government officials, to discuss the hike at length and arrive at a consensus.

GST on fabrics was increased to 12 percent from 5 percent and on apparel of any value to 12 percent. At present, pieces priced up to Rs 1,000 are subject to 5 percent GST.

CAIT in its letter requested that rate be maintained at 5 percent and reduced from 12 percent to 5 percent wherever applicable.


"Further, the goods which are lying in stock of the businessmen and sold on MRP (maximum retail price) the additional burden of 7 percent will be on the businessmen. This increase in tax rate will not only hamper domestic trade, it will (also) affect the exports adversely,” the letter said.

GST hike was against the idea of Make In India and Atmanirbhar Bharat, it said.

CAIT’s demand has found support in political quarters as well.

Former West Bengal finance minister and now adviser to the state chief minister Amit Mitra urged PM to convene an urgent meeting of the GST Council to reverse the hike. He made a similar request to the finance minister.

"Modi Govt will commit another blunder on Jan 1. By raising GST on (man-made) Textiles (from) 5 per cent to 12 per cent, 15 million jobs will be lost and 1 lakh units will close. Modi ji, call a GST Council meeting now and reverse decision before sword of Damocles falls falls on the head of millions of people," Mitra tweeted.

Telangana’s industries minister KT Rama Rao said the GST hike on handlooms and textiles would be the death knell for the industry. Rao, who is also the working president of the ruling Telangana Rashtra Samithi, sought the Prime Minister’s intervention to “save weavers”.

"Hon'ble narendramodi Ji, on the national handloom day you had talked of strengthening Vocal4Handmade. Contrary to the idea, your govt has enhanced GST on Handlooms & Textiles from 5 to 12 % which will be a death knell for the industry. Request you to intervene & save weavers," Rama Rao, son of Chief Minister K Chandrasekhar Rao, tweeted.

CAIT, in its letter, also requested that the deadline for filing income-tax returns be extended.

"Many technical glitches are being faced on the portal due to which lot of time is wasted, overlapping of dates for various compliances like due date of filing of income tax returns, GSTR9, GSTR-9C is another complex issue,” the letter said.
Moneycontrol News
first published: Dec 27, 2021 07:11 pm
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