The GST rate on fabrics will be raised to 12% from 5% in January 2022, while the GST rate on garments of any value will be raised to 12% from 5% in January 2022, compared to the previous rate of 5% on items priced up to Rs 1,000.
Textiles (including woven fabrics, synthetic yarn, pile fabrics, blankets, tents, accessories such as tablecloths or serviettes, rugs and tapestries) have also seen their rates increase from 5% to 12%, while footwear of any value has seen its rate increase from 5% (up to Rs 1,000/pair) to 12%.
The Clothing Manufacturers Association of India (CMAI), according to reports, expressed “extreme disappointment” with the government’s decision to raise GST rates on clothing on November 19.
This cost increase will have a substantial impact because the industry is suffering inflationary headwinds with rising raw material prices, particularly yarn, packing material, and freight.
The GST Council, according to reports, recommended the rise.
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