In an emergency meeting today, triggered by a letter from the finance minister of Gujarat to the Union finance minister Nirmala Sitharaman, the GST Council has decided to retain the status quo in tax rate on textiles and apparel. As a result, the scheduled implementation of increasing tax from 5 per cent to 12 per cent from January 1 is now deferred.

The unprecedented meeting held today was brief and had only one agenda, i.e., the request for reconsideration of the September 2021 decision with respect to increasing the GST on textiles from 5 per cent to 12 per cent.

The Gujarat finance minister had written a letter on December 29^th seeking a reversal of the decision taken by the GST Council in September this year.

At today’s Council meeting, it was decided to retain ‘status quo’ in the case of textiles, i.e., “we are not going to increase tax from 5 per cent to 12 per cent,” Sitharaman said at a press conference conveyed soon after the GST Council meeting ended.

“The Council decided to add ‘textile’ along with other items that the Rate Rationalisation Committee is currently considering. The committee will review and submit a report by February 2022. Post the report, the GST Council will hold a meeting to discuss the committee’s recommendations,” Sitharaman added.

“I welcome the GST council’s decision to send the issue of textiles GST rate to the Tax Rate Rationalisation Committee for review,” minster for commerce and textiles Piyush Goyal said in a tweet after the decision was announced.

Fibre2Fashion News Desk (RKS)

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