GST on apparel, textiles and footwear up from 5 percent to 12 percent

By

Maverick Martins

Published
Nov 22, 2021

The government of India has increased goods and services tax (GST) on finished products such as apparel, textiles, and footwear from 5 percent to 12 percent, effective January 2022.
 

The notification was passed by the Central Board of Indirect Taxes and Customs (CBIC) on November 18.
 
Clothing and footwear manufacturers are disappointed with the government’s decision to hike GST rates and requested the government to roll back the decision.

“The Clothing Manufacturers Association of India (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.
 
“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,” CMAI added.
 
The notification, issued late on Thursday, was based on the recommendations of the GST Council in September 2020.