The Indian government is increasing the GST from 5% to 12% on clothes and footwear from next year with almost ₹1000 on each product.”
The CBIC(aka Central Board of Indirect and Customs) has decided to hike taxes to 12% from 5% from the next year, i.e., on January 1, 2022. The consumers experience a sudden increment in pricing on fabrics and footwear products from January 1, 2022. On November 18, 2021, the Central Board of Indirect Taxes and Customs notified everyone about the hike of GST(Goods and Service Tax).
Similarly, the GST rates of synthetic fibers and yarns have declined to 12% from 18%. This declination is done to restore the uniformity in the GSTs across various sectors and eliminate disturbances in the infrastructural workflows. Another major reason to reduce the GST on synthetic fibers and yarns is to avoid the situation where the taxes are higher than the finished goods.
Since there is an incredible increase in the taxes of clothes, footwear, and textiles from January 2022, the price of any of these products also hikes from 5% to 12%. Now, buy products such as woven fabrics, yarns, pile fabrics, blankets, bed sheets, mattresses, tents, tablecloths, or other accessories. You should pay an additional 7% when compared to earlier charges. It almost costs ₹1000 per product(One pair) when it comes to footwear.
According to the meeting held in September, the higher officials of the Indian Government involved in the GST department have decided to resolve the inverted duty structure across industries like footwear, clothing, and textile. CMAI)Clothing Manufacturers Association of India) It was quite a disappointing decision of the Indian Government to increase the GST rates on apparel, textiles, and footwear from 5% to 12%. It further added that the industry suffers a lot due to this decision while purchasing raw materials, especially yarn, packing material, and more.
Although the Government has increased the GST rates, the common people would suffer a lot with this decision due to the sudden increase in the product rates. As a result, losses occur in the business, affecting the entire industry. Not only will textile or footwear face challenging situations, but the industries that use yarns and synthetic materials will be affected by the decision of GST hikes. However, no one can predict the future. So, always hope for the best, and let’s see what happens next. Stay tuned for further updates!