FM-chaired GST Council defers hike in GST on textiles from 5% to 12%

The GST rate hike on textiles from 5 per cent to 12 per cent was to come into effect from January 1.

The GST council on Friday has unanimously decided to put on hold off a proposal to increase GST on textiles from 5 per cent to 12 per cent. The matter will be discussed again in the next round of council meet for future roadmap.

On December 30, several states had flagged that a higher tax rate on the textile industry from January 1 should be put on hold. Union Finance Minister Nirmala Sitharaman had announced in a pre-budget session that states like Gujarat, West Bengal, Delhi, Rajasthan and Tamil Nadu were not in favour of a hike in GST rate on textiles from 5 per cent to 12 per cent with effect from January 1, 2022.


The 46th meeting of the GST Council, chaired by Sitharaman and comprising state FMs, is scheduled on December 31, with the only agenda to consider Gujarat’s demand of putting the rate hike on hold, as also representations received from the other states and Union Territories.

The 46th meeting of the GST council chaired by FM Sitharaman and comprising of the State Finance Ministers holds significant importance as it is taking place ahead of the Union Budget 2022-23, which is scheduled to be presented in the parliament on February 2022.