The Confederation of All India Traders (CAIT) has asked Finance Minister Nirmala Sitharaman to defer the implementation of the GST rate hike for textiles and footwear.
Textiles and footwear would be taxed at a higher rate, from 5% to 12%, according to the proposal. CAIT described the action as "illogical" and "outside the canon of GST tax system," particularly at a time when the country's domestic trade is on the verge of recovery from the huge harm caused by Covid-19's last two spells.
"It is worth noting that GST collection across the country is increasing every month, and any rise in tax rates without addressing stakeholders will run counter to Prime Minister Narendra Modi's appeal for 'ease of doing business,'" the letter stated.
"As a result, we will request that you postpone the implementation of the tax rate hike for a period of time and, in the meantime, establish a task force under the chairmanship of the Chairman, Central Board of Indirect Taxes, comprised of trade representatives and senior government officials to discuss the issue in depth and reach a consensus," it added.
For several years, according to CAIT, there was no tax on textiles or fabrics.