New Delhi: The GST Council on Friday decided to delay the tariff increase for textiles to 12% from 5%.
It has referred to this problem to the minister panel, which reviewed rationalization of levels, Finance Minister Nirmala Sitharaman.
“It was a brief meeting where there was only one agenda.
It was triggered by a letter written to me by Gujarat Minister of Finance, asking for a re-consideration of the September 2021 decision taken on the Board,” Sitharaman told the conference press after the end of the emergency meeting.
“What a decision from the current emergency meeting – that we maintain the status quo and do not go to 12% from 5%, meaning not to make corrections now in textile cases,” Sitharaman said.
The 45th meeting of the council in Lucknow in September has decided to improve the reverse task structure in the textile sector and the increase in interest rates is scheduled to take place in January.
Reverse task structure refers to situations where the finished product is below the lower tax block compared to the raw material used as input.
The issue of tariffs on textiles has now been referred to the minister panel led by the Head of the Karnataka Minister Basavaraj Bommai, which reviews the overall level rationalization.
Sitharaman said the panel would submit its report in February and will be circulated to all ministers and the council will discuss it at the end of February or around March.
FM said he had received several representations of the industry associations about this issue.
Some countries demand roll-back from the increase in levels proposed on natural fibers, fabrics and clothing.
The former Bengal Bengal West Amit Mitra, who is now the main head advisor to the Head of State Minister, recently said the proposed increase will lead to the loss of a big job and closing 1 small lakh unit.
Several state finance ministers also increased the problem of rolling up the increase in assignments at their pre-budget meetings with Sitharaman on Thursday.
The GST Board has worked to correct the reverse task structure on at least 10 items and, in the Lucknow meeting, has decided to fix it if there is textiles and footwear.