Domestic traders body Confederation of All India Traders (CAIT) on Monday sent a letter to Finance Minister Nirmala Sitharaman urging deferment of Goods and Services Tax (GST) hike on textiles and footwear, as well as asking for an extension of the due date of Income Tax Return (ITR) filing.
” …Increasing the rate of tax from 5 per cent to 12 per cent on textiles and footwear is illogical and beyond the canon of GST tax structure particularly at a time when the domestic trade of the country is on the verge of recovery from the colossal damage caused due to last two spells of the Covid-19,” CAIT wrote in the letter.
To recall, the union government had notified to increase the tax on natural fibre products from 5 per cent to 12 per cent, including apparels in the lower tax bracket with effect from January 1, 2022.
Elaborating on the request, CAIT added that there was no tax on textile/fabrics for a number of years. Bringing the textile Industry again under tax net itself was a big blow to the entire textile industry, it added.
Mentioning the requests made after the last GST Council meeting held, CAIT stated that the rate be reduced from 12 per cent to 5 per cent wherever applicable.
This will not only add to the financial burden on end-user but will also affect small businessmen badly and will encourage evasion of tax and various malpractices. Further, the goods which are lying in stock of the businessmen and sold on MRP the additional burden of 7 per cent will be on the businessmen, it said.
“This increase in tax rate will not only hamper the domestic trade it will affect the exports adversely. Already the textile industry is not at a competent status with Countries like Vietnam, Indonesia, Bangladesh and China,” the letter to the Finance Minister further stated.
Additionally, the industry body also urged the central government to extend the Income-Tax Return filing date on account of delays and several glitches being faced by taxpayers on the new IT portal.
To be sure, the last date of filing Income-Tax Returns for the financial year 2020-21 (AY21-22) is December 31, 2021.
Highlighting the difficulties, it said that very less time has been provided after the introduction of the new portal. Frequent changes in various Forms and their utility are resulting into duplication of work, overlapping of dates for various compliances like due date of filing of Income tax returns, GSTR 9 , GSTR-9C is another complex issue.
“Under such circumstances considering the hardships and practical difficulties being faced by the professionals and in the interest of the businessmen who are dependent upon the tax professionals for filing their returns, it is requested that the due dates of filing of Income Tax returns may kindly be extended to a later date,” CAIT stated in the letter.