Overview
The 46th GST Council meeting was held on 31st December 2021, at Vigyan Bhavan in New Delhi. The meeting took place under the chairmanship of the Union Finance Minister Smt. Nirmala Sitharaman. Besides the finance ministers of the states and union territories, other senior officers also attended the meeting. The aim of the meeting was to discuss the tax rate applicable to the textile industry.
Key matters discussed in the council meeting
The Union Finance Minister announced that the 46th GST Council meeting was called under emergency procedure during a press conference. Only two days’ notice was given to call this emergency meeting. The only item on the agenda was the GST hike on textile goods. The Finance Minister for Gujarat had requested the Union Finance Minister to reconsider the 45th GST Council meeting decision on the increase of tax rate on textiles. Thereafter the Council has put the tax rate of 5%-12% on textiles on hold. In addition, the Council has informed the Group of Ministers (GoM) to submit a report on the GST rate of textiles by February 2022. This committee will look at the rate rationalization and the textile rates will be again put to the committee for review. After submission of the report, the GST Council will call a meeting to deliberate on the committee’s report, Every item on the report will be discussed. Thus, the GST Council unanimously decided to postpone the tax rate applicable to textiles.
GST hike on textile was the main agenda of the meeting, hence, no discussion on GST hike on footwear was done. Thus, a 12% GST rate will be applicable on footwear from 1st January 2022. The next GST Council Meeting will most probably be held in late February 2022 or early March 2022. The meeting was very brief and took place on short notice.
Significance of the meeting
This meeting becomes significant as it was held before the Union budget presentation. The Union budget will be presented in the Parliament on 1st February 2022.
45th GST Council meeting
In the 45th Council meeting, the Union Finance Minister announced the formation of the Group of Ministers to look into the rate rationalization of certain goods and services. The Fitment Committee has also proposed several recommendations regarding slab and rate changes to the GoM. The GST Council also decided that the concessional GST rate will be applicable on COVID-19 related medicines till 30th September 2021. It was further extended till 31st December 2021. However, the extension was only given for medicines that were exempted earlier and not medical equipment. Additionally, life-saving drugs that are not connected with COVID-19 but are very expensive from GST taxation were also given exemption.
The GST rate was reduced on the following items:
cancer-related drugs (reduced from 12% to 5%)
retro-fitment kits for vehicles used by disabled persons (reduced to 5%)
fortified rice kernels (reduced from 18% to 5%)
biodiesel (reduced from 12% to 5%)
Recommendations of the 46th GST Council Meeting
The 46th GST Council Meeting has decided to defer the decision of the 45th GST Council meeting on the GST hike on textiles. The tax rate of 5% to 12% has been retained by the Council. The Group of Ministers will submit a report by February 2022 and the report shall be discussed by the Council to give the final decision. Thus, the current GST rates in textiles will extend beyond 1st January 2022.
Leave a Comment
Previous Comments