What is gst and how much it would be on shoes in India: The 12% Goods and Services Tax (GST) that must be paid on footwear with a retail value that does not exceed Rs.1,000 per pair was announced by the Central Board of Indirect Taxes and Customs (CBIC). Starting on January 1, 2022, the Goods and Services Tax (GST) rate that applies to footwear will rise from 5% to 12%, having previously been 5%. At this time, a GST fee of 5% is applied to the selling value of each pair that is up to Rs 1,000. The industry will benefit from the modifications in rates since they will provide clarity to the situation and put an end for good to the problems created by the inverted duty structure. The fitment committee has suggested raising the rate on footwear with a selling value of less than Rs 1000 from 5% to 12%. Currently, the rate is 5%. These price adjustments are anticipated to take effect as of 01.01.2022, according to the current plans.
AAR Ruling In its decision regarding an application that had been submitted by M/s Skechers South Asia Private Ltd, the Customs Authority of Advance Ruling (AAR) in Mumbai said that the 45th GST Council meeting had addressed changing GST rate in order to fix inverted duty structure in footwear. The fitment committee has suggested raising the rate on footwear with a selling value of less than Rs 1000 from 5% to 12%. Currently, the rate is 5%. These price adjustments are anticipated to take effect as of 01.01.2022, according to the current plans. As a result, this judgment will continue to be in effect until such time as the GST rate is modified and put into effect. Nirmala Sitharaman, the Minister of Finance for the Union of India, made the announcement on Friday that the Goods and Services Tax (GST) Council has agreed to postpone the increase in the tax rate on textiles from 5% to 12%. Sitharaman said, at a briefing for the media, that the GST meeting was convened in accordance with the "emergency clause," and that the GST Council merely had a quick meeting with a single agenda item.
She said that the Gujarat Finance Minister had asked for a postponement of the decision about the inversion of the tax structure that had been made at the September Council meeting. Beginning on January 1st, a 5% to 12% increase in the GST rate that applies to textiles was scheduled to go into force. According to the FM, the GST Council has made the decision to postpone the adjustment of the inverted duties for textiles, and the matter will once again be submitted to the "rate rationalisation panel." The decision of the Council comes after a number of states on Thursday called attention to a higher tax rate that will go into effect on January 1 for textile items and urged that the rate rise be put on hold. After the 46th meeting of the GST Council, which was presided over by the Union Finance Minister Nirmala Sitharaman, Andhra Pradesh Finance Minister Buggana Rajendranath Reddy told reporters that several states said in the meeting that there was no clarity on the GST to be imposed on apparel, clothing, and textile products. Sitharaman is the Union Finance Minister. The meeting of the GST Council has reached the conclusion that the GST rate on textile would remain unchanged at 5% and will not be increased to 12% as was originally proposed.
The question of the GST rate that applies to textiles will be sent to the committee in charge of tax rate rationalization, which will provide its recommendation by the end of February: FM picture sent on Twitter by @DCjIvNTp2Z of Nirmala Sitharaman December 31, 2021 "Several states including Andhra Pradesh petitioned the Council to take back the previous decision to hike the GST on textiles from the existing 5% to 12% from January 1st, 2022," he added. "The decision was made to increase the GST on textiles from 5% to 12% from January 1st, 2022." Even then, there was little clarification about the rate of GST that would be applied on man-made and natural textiles, as well as synthetic and natural fabrics such as nylon and cotton. According to what he claimed, the Council did not have any projections available on probable increases in refunds even if they were to be issued. At this time, the tax rate on man-made fiber (MMF) is 18%, the tax rate on MMF yarn is 12%, and the tax rate on textiles is 5%.
Andhra Pradesh will be hit the hardest by any increase in the value-added tax (VAT) imposed on textiles, according to Reddy, who explained that this is due to the fact that there are approximately 3 lakh handloom weavers in the state and the majority of people wear cotton clothing, as opposed to nylon clothing in other states. "...we asked that the Council take a judgment on raising the GST on textiles after completing an in-depth research and reviewing the facts," he went on to say following the previous statement. The meeting of the GST Council that took place on Friday is noteworthy due to the fact that it took place in advance of the Union Budget for 2022-23, which is expected to be presented in Parliament on February 1, 2022. During the pre-budget meeting that Union Finance Minister Nirmala Sitharaman presided over, representatives from states such as Gujarat, West Bengal, Delhi, Rajasthan, and Tamil Nadu stated that they do not support increasing the rate of the goods and services tax (GST) that is currently applied to textiles from the current rate of 5% to 12%. During the previous meeting on September 17, the Council reached the conclusion that the inverted duty structure in the textile and footwear industries needed to be corrected.
All footwear, regardless of price, would be subject to a twelve percent goods and services tax (GST) beginning on January 1, 2022. Additionally, all textile items, with the exception of cotton, including ready-made clothing, were to have a twelve percent GST. A former finance minister of West Bengal and current advisor to the state's Chief Minister, Amit Mitra, had earlier urged the Center to roll back a proposed hike in textile from 5% to 12%, saying that this would lead to the closure of approximately 100,000 textile units and the loss of 1.5 million jobs. The Minister of Industries for the state of Telangana, KT Rama Rao, has also argued in favor of rescinding the government's intended decision to raise GST rates. The industry has also voiced opposition to the increase in tax from 5% to 10%, citing increased compliance costs, particularly for the unorganized sector and MSMEs, in addition to the fact that it would make poor man's apparel more costly. Dear Reader, Business Standard has always made a concerted effort to give timely information and analysis on issues that are of interest to you and have larger political and economic repercussions for the nation and the globe as a whole.
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