GST Hike on Readymade Clothes Looms: Prices Expected to Rise, Proposal Reaches Nirmala Sitharaman
New Delhi (The Uttam Hindu): The Group of Ministers (GoM), led by Deputy Chief Minister and Finance Minister Samrat Choudhary, has proposed an increase in GST rates on expensive readymade garments. This proposal is now awaiting a decision from the GST Council, which is chaired by Union Finance Minister Nirmala Sitharaman. The Council is scheduled to meet on December 21 in Jaisalmer, Rajasthan.
In the GST Council meeting held on December 2, Samrat Choudhary recommended introducing three GST slabs for readymade garments. The proposal includes a 5% GST on garments priced up to Rs 1500, an 18% GST for those priced between Rs 1501 and Rs 10000, and a 28% GST on garments exceeding Rs 10000. The upcoming GST Council meeting is also expected to address the issue of GST on life and health insurance premiums. A potential exemption for premiums paid by senior citizens for health insurance, as well as for term life insurance premiums paid by all individuals, may be discussed.
Proposed GST Rates on Readymade Garments:
| Price Range | GST Rate |
|-----------------------------|-----------|
| Up to Rs 1500 | 5% |
| Rs 1501 - Rs 10000 | 18% |
| Above Rs 10000 | 28% |
November GST Collection Insights:
In November, Bihar's GST revenue saw a 12% increase compared to the previous year, totaling Rs 1561 crore, up from Rs 1388 crore in November 2023. This significant growth is attributed to the onset of weddings and other ceremonies. The Commercial Tax Department expects this positive trend to continue until the end of the financial year. However, there was a slight dip of Rs 43 crore in comparison to the Rs 1604 crore collected in October 2023, a month boosted by the festivities of Dussehra and Diwali.
In comparison to Bihar, Maharashtra saw a 14% rise in GST revenue, with Rs 29948 crore collected in November, significantly outpacing Bihar. Neighboring Jharkhand also experienced a 12% increase, collecting Rs 2950 crore. Additionally, Bengal and Uttar Pradesh recorded a 6% and 5% increase in GST, respectively. Nationally, GST collection increased by 9.38%. Despite this growth, Bihar continues to lag behind its neighboring states in terms of total GST revenue, mainly due to a more favorable industrial and business environment in these regions.
