Shoes, Clothes Will Become Costly As GST Increased To 12% For These Goods

GST rate on fabrics has been increased to 12 percent from 5 percent from January 2022.

There was a notification from the Central Board of Indirect Taxes and Customs (CBIC) on November 18. CMAI expressed great disappointment with the government’s decision to raise GST rates on clothes on November 19.

“CMAI, along with associations and trade bodies from all over India have been vigorously representing to the government and GST Council not to implement this change, and it is indeed extremely disappointing that the Council has chosen not to heed their plea,”

Rajesh Masand, president, CMAI said in the statement, Mint reported

GST Rate Increased On Fabrics

GST rate on fabrics has been increased to 12 percent from 5 percent from January 2022.

Textile like woven fabrics, synthetic yarn, pile fabrics, blankets, tents, accessories such as tablecloths or serviettes, rugs and tapestries and footwear of any value has been hiked from 5 percent (up to Rs 1,000/pair) to 12 percent.

What CMAI Has To Say Regarding This?

According to sources, the Clothing Manufacturers Association of India (CMAI) expressed “deeply disappointment” with the government’s decision to raise GST rates on clothes on November 19.

The statement added that impact of this cost increase will be pronounced as the industry is facing inflationary headwinds, with prices of raw materials, especially yarn, packing material, and freight on an upswing. The market was expected to see a 15-20 percent price increase in apparel cost in the coming season even without the GST rate increase. Over 80 percent of India’s apparel market comprises garments priced below Rs 1,000, the industry body added.

“CMAI believes this measure is completely misplaced, as it is reportedly introduced primarily to address the Inverted Duty Structure existing in a section of the Industry – and this sector is not more than 15 percent of the total industry. To resolve a problem which exists in 15 percent of the Industry therefore, this move will adversely impact 85 percent of the total industry,” said Masand.