GST on textiles will not be increased from 5 to 12 per cent: FM Sitharaman

New Delhi, Dec 31: The GST Council on Friday decided to defer the decision to increase tax on textiles from 5 per cent to 12 per cent, Union Finance Minister Nirmala Sitharaman said.

The decision to maintain the status quo on the GST rate on textiles was taken in an "emergency meeting" of the GST Council held in Delhi. "We retain the status quo. We have decided don't go from 5 per cent to 12 per cent," ANI quoted Sitharaman as saying in a media briefing after the GST Council meeting.

It will now be sent to the tax rate rationalisation committee, the Finance Minister said, stating that it will be submitting the report in February. She said that the issue related to textile was only discussed and the footwear issue was not discussed during the meeting.

The Council in its previous meeting on September 17 had decided to correct the inverted duty structure in footwear and textile sectors. With effect from January 1, 2022, all footwear, irrespective of prices, will attract GST at 12 per cent, PTI reported.

It was also decided that 12 per cent uniform GST rate would apply on textile products, except cotton, including readymade garments.

However, many states including Gujarat, Rajasthan and Tamil Nadu had opposed the proposed hike in tax on textiles to 12 per cent, from 5 per cent. Traders and weavers too held protests in parts of the country over the government's decision to increase the tax on textile.