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Finance Ministry Notifies 12% Uniform GST Rate on Fabrics, Apparel & Footwear

The Central Board of Indirect Taxes and Customs (CBIC) announced a uniform GST rate of 12% on different kinds of fabrics, footwear and apparel. This rate change was notified to correct the inverted duty structure of these goods and will be effective from 1st January 2022. According to the notification, the new GST rate of 12% will apply to all apparel & footwear irrespective of their value.

Before this notification, a 5% GST rate applied to apparel (per piece) & footwear (per pair) of up to Rs. 1000. Similarly, certain synthetic fibres and yarn were taxed at 18%. However, according to the notification issued last Thursday, the new GST rate of 12% will apply to all these products starting from next year.

The rate change on certain products was announced in September 2021 during 45th GST Council Meeting, but the effective GST rate was not notified. CBIC notified the same on 18th November 2021.

GST Rate Changes w.e.f 1st January 2022
Products  Old GST Rate  New GST Rate 
Apparel (per piece) of up to Rs. 1000 5% 12%
Footwear (per pair) of up to Rs. 1000 5% 12%
Woven fabrics, Sewing thread of man-made filaments, Synthetic filament yarn other than sewing thread, synthetic monofilament, Artificial filament yarn including artificial monofilament 5% 12%
Certain synthetic fibres and yarn 18% 12%

Read the entire notification – https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-14-2021-igst-rate-english.pdf

In addition to the above list, 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 travelling 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 be taxed at 12%.

Tents; sails for boats, sailboards or landcraft, camping goods, sets, consisting of woven 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 be charged at 12% GST from 1st January 2022.

The uniformity in GST rates on certain goods will bring relief to inverted duty structure issues across the supply chain and bring an efficient tax structure. According to the GST experts, these changes will give clarity to the businesses and settle the problems related to the current tax structure.


What is the timeline given to the tax official for approving the TDS registration application?

After receiving the registration application for the first time, the tax office has three working days to process it as TDS. If the taxpayer gets queries, they must respond within seven working days. After the taxpayer responds, the tax office has seven working days to process the TDS registration.