From January 1, 2022, next year, shoes and clothes can become expensive. This will happen because of a decision of the GST Council. In this news, we are going to tell you all the things related to this decision.
New Delhi. If you are fond of buying and wearing new clothes and shoes then this news is for you only. At the beginning of next year i.e. from January 1, 2022, the prices of clothes and shoes may increase. In fact, the GST Council has accepted the long-standing demand for changes in the inverted duty structure of the clothing and footwear industry. The GST Council has said that the new duty structure will be implemented from January 1, 2022. After this, there are speculations that this will make clothes and shoes expensive.
People associated with the textile and shoe industry were demanding
In the meeting of the GST Council held last month, it was decided to change the inverted duty structure of the clothing and footwear industry. It is worth noting that people associated with the textile and shoe industry business had been demanding a change in the structure for a long time. He said that there is 12 per cent GST on raw materials for making shoes, while the GST on finished products is only 5%. The duty paid on raw material should be refunded to make up for this loss.
Prices will increase from January 1
Let us tell you, currently 5% GST is applicable on clothing and footwear products, while 18 percent GST is applicable on more expensive shoes. After this decision of the government, the prices of clothes can be increased from January. After the increase in GST, the prices of clothes and shoes will increase, which will have a direct impact on the pocket of the common man.
Because of this, prices will increase
In fact, currently, inputs in the MMF fabric segment (fibre and yarn) attract GST rates of 18 per cent and 12 per cent, while the GST rate on MMF fabric is 5 per cent and finished goods apparel at 5 per cent and 12 per cent. Thus, the GST on inputs is higher than the output and thereby increases the effective rate of taxation of MMF fabrics and fabrics and violates the principle of fiber neutrality.
Because of this, yarn and fabrics manufacturers have been demanding a change in the inverted duty structure of the clothing and footwear industry for a long time. Therefore, in the name of resolving their problem, the government has increased the tax on garments instead of reducing GST on manmade yarn-fabrics to 5%. This will make clothes more expensive.
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