Council to Revisit Plan Over GST Rates Hike for Textiles


The government may revisit soon the Goods and Services Tax (GST) rates for most textile products in the man-made fibre (MMF) value chain.

The rate hike was to take effect from 1st January, 2022, but in late December 2021 GST had to drop plan to GST rates hike from 5% to 12% on said items due to protests from the industry.

In this regard, Finance minister has said that correcting the inverted duty structure in the textiles value chain is essential to attract investment in the sector. “The correction is required for the production-linked incentive scheme for the sector. Or else, investments are not going to come into certain areas,” she said, addressing a post-Budget meeting with industry and trade representatives in Mumbai.

The GST Council’s decision to alter the rate structure for textile products was aimed at resolving the long-unresolved issue of inverted duty structure in the synthetic textile segment. While, several states and the fabrics-to-garments industry, which include thousands of MSMEs and tiny units, opposed this move as they saw it leading to a demand compression.

A group of ministers (GoM) is currently reviewing the entire GST rates structure would review the issues with regard to the textiles value chain too and submit its report in February-March.


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