Highlights Of 46th Gst Council Meeting

The Goods and Service Tax (GST) council held its 46th GST council meeting on 31st December 2021, at Vigyan Bhavan in New Delhi. The meeting was held under the Chairmanship of Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman. The

GST Council has recommended deferring the decision to change the rates in textiles recommended in the 45th GST Council meeting. Consequently, the existing rates in the textile sector would continue beyond 1st January 2022. The Council decided to keep the GST hike on textiles from 5% to 12% on hold.

Key Highlights of 46th GST Council Meeting

The key decisions taken at the 46th GST Council Meeting is given here: The 46th GST Council meeting was called under emergency provisions. Finance Minister informed that It was a very brief meeting with the GST hike on textiles. The meeting was triggered by a letter that written to the Finance Minister by the finance minister of Gujarat, requesting for reconsideration of the September 2021 decision taken in the Council.

The GST Council has decided to retain the status quo on GST rate on textile to 5% and not raise it to 12%
The FM clarified that the next GST Council meeting will be held at the end of February 2022 or early March 2022.

The Union Finance Minister (FM), during the press meet, stated that the 46th GST Council meeting was called under the emergency provisions with just two days' notice. This meeting holds significance as it is taking place ahead of the Union Budget which is presented on the first day of February by the Finance Minister in Parliament.

Inverted duty scheme on footwear and textiles

At the 45

th GST Council meeting in Lucknow on September 17, the Council had decided to rectify the inverted duty structure for footwear and textiles. Subsequently, the rate for footwear and textiles for any value was raised to 12 percent, effective from January 1, 2022. Earlier the GST rate was 5 percent for sale value up to Rs 1,000 per piece in the case of apparel and per pair in the case of footwear. For more details on Input Tax Credit Refund – Inverted Tax Structure, click here

GST Rate for Textiles

The GST Council Meeting has decided to retain the status quo on the rate at which Textiles are taxed. GST Rate will remain at 5% for now.

GST Rate for Footwear

Finance Minister clarified that the GST hike on footwear was not on the 46

th Council’s agenda, and no discussion happened in this regard. Hence, the new GST rate of 12% will apply to footwear from 1st January 2022. The official Notification of the Central Board of Indirect Taxes & Customs (CBIC) is attached here for reference:

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Frequently Asked Questions

Common questions about 46th GST Council Meeting.

The key decision taken at the 46th GST Council Meeting was to defer the proposed hike in GST rates for textiles from 5% to 12%. Consequently, the existing 5% GST rate on textiles will continue beyond January 1, 2022.

The 46th GST Council Meeting was called under emergency provisions with just two days' notice. This was triggered by a letter written by the Finance Minister of Gujarat to the Union Finance Minister, requesting a reconsideration of the Council's earlier decision to hike GST rates on textiles.

In the 45th GST Council meeting held in September 2021, it was decided to rectify the inverted duty structure for footwear and textiles by raising the GST rate to 12% for items of any value, effective from January 1, 2022. Earlier, the GST rate was 5% for sale value up to Rs 1,000 per piece for apparel and per pair for footwear.

No, the decision to keep the GST rate unchanged applies only to textiles. The Finance Minister clarified that the GST hike on footwear was not on the agenda of the 46th Council Meeting, and no discussion happened in this regard. Therefore, the new GST rate of 12% will apply to footwear from January 1, 2022.

The Union Finance Minister stated that the next GST Council Meeting will be held at the end of February 2022 or early March 2022.

The 46th GST Council Meeting holds significance as it is taking place ahead of the Union Budget, which is presented on the first day of February by the Finance Minister in Parliament.

The inverted duty structure refers to a situation where the tax rate on inputs is higher than the tax rate on outputs. The GST Council had decided to rectify this inverted duty structure for footwear and textiles by raising the GST rates to 12%.

Before the 46th GST Council Meeting, the existing GST rate on textiles was 5%.

No, the 46th GST Council Meeting was called specifically to discuss the GST hike on textiles, and no other sectors or GST rates were discussed.

The article does not provide any information on how the decision to defer the GST hike on textiles was received by various stakeholders or industries. It only states the key decisions taken during the 46th GST Council Meeting.