FM notifies effective January 1, 2022, GST rates hike to 12% on MMF, yarn, fabrics
22 November 2021, Mumbai:
Experts said though there is a provision in GST law to claim the unutilised Input Tax Credit (ITC) as a refund, there were other complications and resulted in more compliance burden. The inverted tax structure caused an effective increase in the rate of taxation of the sector.
The finance ministry has notified uniform 12 per cent GST rate on manmade fibre (MMF), yarn, fabrics and apparel, thereby addressing the inverted tax structure in the MMF textile value chain.
Currently, tax rate on MMF, MMF yarn and MMF fabrics is 18 per cent, 12 per cent and 5 per cent, respectively.
The taxation of inputs at higher rates than finished products created build up of credits and cascading costs. It further led to accumulation of taxes at various stages of the MMF value chain and blockage of crucial working capital for the industry.
(The news article has not been edited by DFU Publications staff)
Dear Reader, we at DFU Publications are committed to providing the latest news updates on trade development and insights, to keep our readers informed. Stay tuned. Subscribe to our newsletter.
TOP 5:
2. Consumers will determine growth of sustainable fashion e-comm in India
3. Myntra to offer 1 mn styles from about 7,000 brands at the 'Big Fashion Festival'
4. Maharashtra government honors VIP as 'Best Innerwear Brand' for 2021-22
5. Nike strengthens retail presences with new store at DLF Mall of India, Noida
