The GST Council's 46th meeting, headed by Union Finance Minister Nirmala Sitharaman and attended by state equivalents, resolved to continue debating the subject at its next conference.
The GST Council has agreed to postpone a rate increase on textiles for the time being. After many states, notably Tamil Nadu and West Bengal, objected, the Council decided to put the plan to raise the textile rate of taxation to 12% on hold.
The increased rate would have taken effect on January 1st.
"Beginning in December, complaints began to arrive, and on December 29, a statement from the Gujarat FM arrived, prompting the emergency meeting." "The decision of the urgent Council group meeting is that we keep the status quo and do not go to 12%, from 5%, meaning we do not conduct the adjustment now in the area of textile," finance minister Nirmala Sitharaman said after the meeting.
Manmade fibres are now taxed at 18%, MMF yarn at 12%, and textiles are taxed at 5%.
The GST Council's 46th meeting, headed by Union Finance Minister Nirmala Sitharaman and attended by state equivalents, resolved to continue debating the subject at its next gathering.
The Council voted to fix the inverted duty structure in the footwear and textile industries at its last meeting on September 17. All apparel, regardless of price, will be subject to a 12% GST beginning January 1, 2022, and all textile items, save cotton, including readymade clothing, will be subject to a 12% GST beginning January 1, 2022.
"Because it's an issue of inversion, a number of ministers discussed the long-term solutions the Council may consider, as well as a revenue-generation strategy." A tariff rationalisation committee has already been formed... And it was determined today at the emergency meeting that the textile would be resubmitted to the committee for evaluation, along with all the other materials that had been submitted...And it was determined today in the emergency meeting that the textile would be resubmitted to the committee for evaluation, along with the other items that are currently being reviewed," Sitharaman added.
The Council resolved that the rate rationalisation committee would examine textiles as part of their evaluation and provide a report by February, which would then be sent to all ministries. Following that, a Council meeting would be called either in late February or early March to examine the committee's proposal or report.
Gujarat, West Bengal, Delhi, Rajasthan, and Tamil Nadu have all stated that a raise in the Goods and Services Tax (GST) rate on textiles from 5% to 12%, effective January 1, 2022, is not in their interests.
Former West Bengal finance minister and current advisor to state Chief Minister Amit Mitra had previously requested the Centre to reverse a proposed textile tariff rise from 5% to 12%, claiming that it would result in the closure of 1 lakh textile plants and the loss of 15 lakh jobs.
Sitharaman also claimed that the almost Rs 200 crore cash taken from perfume producer Peeyush Jain was not BJP funds, and justified the timing of the tax raids, claiming that it was based on actionable intelligence.
As part of a tax fraud probe, the Income Tax Department searched various locations in Uttar Pradesh related to perfume sellers and others on Friday. Kanpur, Kannauj, the national capital area, and a few more locations were searched. The government is looking for numerous locations associated with the perfume industry and allied enterprises.
Once questioned about the opponent's claim that the Rs 197.49 crore cash recovered from fragrance maker Peeyush Jain in UP's Kannauj was her party's money and that the tax department raided the person by "mistake" and are now raiding the other Jain they had initially decided to hit, Sitharaman said, "It is not BJP funds."
As she attempted to defend the raids, she stated that former Chief Minister Akhilesh Yadav is "shaken."
"How do you know who owns the money? Are you his business partner? Because only couples are aware of where their money is stored, "she stated.
She inquired if the raiding forces came empty-handed, dismissing the opposition's claim that the raids are politically motivated. Money recovered proves there was actionable intelligence, she said, adding that the arrests on Friday were also based on these information.
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