Modified GST Rates on Man-made Fibres, Apparel, Fabrics

The GST Council in its 45^th meeting has made the recommendations relating to changes in GST rates on footwear and textiles and also announced that the inverted duty anomalies in the textile sector would be corrected from January 1, 2022. Giving effect to this decision The Central Board of Indirect Taxes and Customs (CBIC) has notified Modified goods and service tax rate on man-made fibers, apparel, fabrics vide a Notification No. 14/2021- Central Tax (Rate) dated November 18, 2021.In this article, we look at the GST rate for apparel, fibers, and fabrics in detail.

Synopsis of Notification

The GST Council in its 45^th meeting had decided to correct the inverted duty structure on footwear and textile. On the recommendations of the GST Council, the Ministry of Finance (Department of Revenue) has further amended the No.1/2017-Central Tax (Rate), dated the 28th June 2017, and issued Notification No. 14/2021.

The Central Board of Indirect Taxes and Customs (CBIC) has notified an increase in goods and service tax rate of various kinds of textiles, apparel, and footwear to 12% from 5% earlier
GST rates for certain synthetic fibers and yarn have been lowered from 18% to 12%
The new GST rate will be effective from January 1, 2022.

GST Rate on Article of Apparel

CBIC's latest notification specifies that the GST rate on articles of apparel of any value will be 12%, from next year (from January 1, 2022). So far, a 5% tax is levied on the sale value of up to Rs 1,000 per piece.

GST Rate on Article of Footwear

The GST rate on Footwear has been changed to 12% from next year. At present, 5% GST is charged on the sale value of upto Rs 1,000 per pair.

GST rate for Woven fabrics

GST rate for the following article on Woven fabrics has been increased from 5% to 12%.

Sewing thread of man-made filaments
Synthetic filament yarn other than sewing thread
synthetic monofilament
Artificial filament yarn including artificial monofilament

Knotted netting of twine, cordage or rope made up of fishing nets and other made up nets, of textile materials, pile fabrics, terry fabrics, knitted or crocheted, blankets and traveling rugs, bed linen, table linen, toilet linen and kitchen linen, curtains and interior blinds, sacks, and bags, of a kind used for the packing of goods, tarpaulins, awnings, and sun-blinds, will also be taxed at 12%. Tents; sails for boats, sailboards or landcraft, camping goods, sets, consisting of woven fabric and yarn, whether or not with accessories, for making up into rugs, tapestries, embroidered tablecloths or serviettes, or similar textile articles, put up in packings for retail sale, will also be charged 12% GST from January 1, 2022. The official notification of Modified GST Rates on Man-made Fibres, Apparel, Fabrics is as follows:

GST Registration

GST LUT Form

Modified GST Rates on Man-made Fibres, Apparel, Fabrics

Synopsis of Notification

GST Rate on Article of Apparel

GST Rate on Article of Footwear

GST rate for Woven fabrics

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