CAIT writes to FM Sitharaman to defer increase in GST rates on Textiles

The Confederation of All India Traders (CAIT) urged Finance Minister Nirmala Sitharaman on December 27 to defer the increase in the GST on textiles, which is set to take effect on January 1, 2022.

With effect from January 1,2022, the government in November notified a 5 percent to 12 percent rise in GST on natural fibre products, including clothes in the lower tax bracket. The decision was made at the GST Council’s most recent meeting in September of this year.

The traders’ group demanded the formation of a task team chaired by the chairman of the Central Board of Indirect Taxes and comprised of industry leaders as well as top government officials to discuss the raise in detail and reach an agreement.

Fabrics now have a 12 percent GST, up from 5%, and clothes of any value has a 12 percent GST. At the moment, anything costing up to Rs 1,000 are subject to a 5% GST.

In its letter, CAIT urged that the rate be kept at 5% and that the rate be decreased from 12% to 5% wherever possible.

“Furthermore, the businesspeople will have an additional burden of 7% on goods that are in their inventory and sold at MRP (maximum retail price).” “This rise in the tax rate would not only stifle internal trade, but it will also have a negative impact on exports,” the letter stated.

It claimed that raising the GST went against the Make in India and Atmanirbhar Bharat concepts.

CAIT‘s demand has received political support as well.

Amit Mitra, a former West Bengal finance minister who is now an adviser to the state chief minister, has urged Prime Minister Narendra Modi to call an emergency meeting of the GST Council to reverse the raise. He approached the finance minister with a similar request.

“On January 1, the Modi government will make another blunder. The increase in the GST on (man-made) Textiles from 5% to 12% will result in the loss of 15 million jobs and the closure of 1 lakh businesses. Call a meeting of the GST Council right now and rescind the decision before the sword of Damocles falls on the heads of millions of people, Modi ji “Mitra said in a tweet.

The GST hike on handlooms and textiles, according to Telangana Industries Minister KT Rama Rao, will be the death knell for the industry. Rao, who is also the working president of the Telangana Rashtra Samithi, asked Prime Minister Narendra Modi to intervene to “rescue weavers.”

“On National Handloom Day, Hon’ble Narendramodi Ji, you mentioned boosting Vocal4Handmade. Contrary to popular belief, your government has increased the GST on handlooms and textiles from 5% to 12%, thus killing the business. I implore you to act and save the weavers ” Rama Rao, the son of Chief Minister K Chandrasekhar Rao, took to Twitter to express his feelings.

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

“Many technological issues are being experienced on the portal, resulting in a significant amount of time being spent,” the letter stated. “Overlapping of deadlines for various compliances, such as the due date of filing of income tax returns, GSTR9, and GSTR-9C, is another complex issue.”