Lok Sabha Question No. 696 (UNSTARRED), answered on 2022-02-07
Subject: Impact of GST Hike
Ministry: FINANCE
Asked by: Anto  Antony, Behanan Benny, Manickam Tagore B, Y. S. Avinash Reddy

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE *****

## LOK SABHA

## UNSTARRED QUESTION NO.696

## TO BE ANSWERED ON MONDAY THE 7 TH  FEBRUARY, 2022 MAGHA  18, 1943 (SAKA)

## IMPACT OF GST HIKE

## 696.   SHRI ANTO ANTONY:

SHRI BENNY BEHANAN: SHRI MANICKAM TAGORE B.:

SHRI Y.S. AVINASH REDDY:

## Will the Minister of FINANCE be pleased to state:

(a)  whether  the  Government  has  taken  cognizance  of  the  devastating  impact  of  7  per  cent Goods and Services Tax(GST) hike on garments, textiles  and footwear businesses,  karigars and  MSMEs  from  Agra  which  is  country's  largest  producer  of  shoes  and  if  so,  the  details thereof;

- (b) whether the decision to increase the GST rate from 5 per cent to 12 per cent on textiles and apparel with effect from January, 2022 has invited countrywide protests from all corners and if so, the details thereof;
- (c) whether the said high tax rates can lead to units shutting down and risk job losses and if so, the details thereof along with the manner in which the Government intends to mitigate the loss of employment caused by this GST hike which is estimated at 15 lakh jobs;
- (d) whether it is true that GST Council proposes to defer the tax rate increase on textiles and apparel for time being or various organizations have demanded a permanent full stop to the said GST increase on these products and if so, the details of decisions taken in this regard;
- (e)  whether  the  Government  has  received  any  representations  from  handloom  industry representatives  requesting  for  reduction  of  GST  on  handloom  textiles  and  pressed  for implementation of zero GST to safeguard the handloom industry and face the competition in the markets and if so, the details thereof along with the response of the Government thereto;
- (f)  whether  the  Government  intends  to  reverse  this  GST  hike  considering  the  slowdown  of business due to rising Covid-19 cases and restrictions on socio-economic activity and if so, the details thereof and if not, the reasons therefor; and
- (g)  whether  the  Government  has  assessed  the  impact  of  the  GST  hike  on  expansion  of  the unorganized and untaxed sectors within the textile industry and it has any plans to reform the GST system and if so, the details thereof and if not, the reasons therefor?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a)  to  (g): Certain  representations  have  been  received  in  this  regard.  GST  rates  are prescribed  on  the  recommendation  of  the  GST  Council.    In  45 th meeting,  the  Council recommended for revising the  rates  of  GST  on  garments,  textiles  and  footwear  to  correct inversion  in  GST  rates  on  these  items.  However,  subsequently,  representations  were received by the Government requesting not to implement these rate changes. The Council took  note  of  these  representations  and  in  its  46 th meeting,  dated  31 st December,  2021, recommended to defer the decision to change the rates in textiles. Consequently, the existing rates in textile sector would continue beyond 1 st January, 2022. As regards handloom textiles, the issue of reduction of GST Rate on Handlooms was placed before the Council in its 21 st meeting dated 9 th September, 2017 and 28 th meeting dated 21 st July, 2018. The Council did not recommend any change in rates.

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