“The GST rate change to correct the reverse tariff structure in the footwear and textile sector, which was discussed by the previous GST Council and postponed for an appropriate period, will take effect from January 1, 2022,” later announced. The official voice statement was held, said.
Textile and footwear companies cannot claim a temporary tax credit (ITC) because raw materials such as threads and fabrics are taxed at a higher tax rate than finished products (clothing and apparel).
India’s Treasury Minister Nirmala Sisaraman said at a news conference today that the reverse obligation of textiles and footwear will be amended from January 1, 2022. She spoke to the media after chairing the 45th Goods and Services Tax (GST) Council in Lucknow. Currently, certain inputs are taxed at a higher tax rate than the finished product.
The GST Council has been discussing the issue of reverse tariff structure in the past, but has not reached a conclusion, especially last year, as reducing GST in raw materials would result in lost revenue.
The main impact of the reverse tariff structure on the working capital of a business. This is because GST, which pays higher tax rates on raw materials, will be blocked until the government announces a refund.
The GST Council held a physical meeting today, after a 16-month gap. The council last met physically in New Delhi on March 14, 2020.
The total revenue of GST collected in August 2021 was 1,12,020 chlores, of which CGST was 20,522 chlores, SGST was 26,605 chlores, IGST was 56,247 chlores (including 26,884 chlores collected from imports of goods) and Cess. 8,646 chlores (including 646 chlores collected at the time of import of goods).
Revenue in August 2021 was 30% higher than GST revenue in the same month last year. During the month, revenues from domestic transactions (including imports of services) were 27 percent higher than revenues from these sources in the same month last year. This is a 14% growth compared to August 2019-20 revenue of 98,202 chlores.
Fiber2Fashion News Desk (RKS)
Reverse tariffs on textiles revised from January 2010: FM in India
Source link Reverse tariffs on textiles revised from January 2010: FM in India