Introduction :
The basis meaning of textile is woven or knitted fabric made from yarn. Textile industry is the second largest employment generating sector in India that has generated huge employment for both skilled and unskilled labour.
There may be few drawback for the textile industry due to the higher tax rate.
Different types of textile sector.
1) Readymade garments
2) Cotton textile
3) Woolen textile
4) Silk textile
5) Art silk and synthetic fibr textile
6) Jute textile
7) Khadi and hand looms
8) Misc textile products
GST rate for different sectors and Different Materials :
The gst council has announced gst rate for different sectors here are the tax rate
1) GST Rate for Garment, Apparel and Clothing
knitted and not knitted garment, Apparel and Clothing fall under chapter 61-62 of HSN Code. If taxable value of the goods dose not exceed Rs. 1000/- per price then GST rate 5% beyond which they will be taxed at 12%.
2) GST Rate for Cotton
Cotton under chapter heading 5201 and 5203 has been kept in 5% rate slab.
The cotton farmer is not liable to registration under gst but buyer of raw cotton from the farmer are required to pay tax on RCM basis as per Sec. 9(4) of the CGST Act, 2017.
3) Raw jute and Silk
Raw jute has been kept at NIL rate of GST i.e. there would be no tax on raw jute. Therefore, as per Section 23 (1)(a) of the CGST Act, 2017 the suppliers dealing only in raw jute are not required to register.
Jute mills are not required to pay tax under Reverse Charge Mechanism (RCM) as mentioned under Section 9(4) of the CGST Act, 2017 because the goods have been kept at NIL rate of duty
Similarly, Raw Silk has also been kept at NIL rate of GST i.e. there would be no tax on raw silk. Therefore, the suppliers dealing only in raw silk are also not required to register.
4) GST on Sarees
Principal manufacturers supply Embroidered Sarees and Fabric to Job workers and get various embroidery designs done on the fabric/sarees. We understand that the textile jobworker would charge an output supply GST of 5% on the composite jobwork supply (other than Man Made Fibre/Filament). This embroidery fabric/saree are then sold by the principal manufacturers to whole-sale and retail sellers. Now the question is What would be the output GST applicable on such embroidered fabric/sarees when the same is sold by the principal manufacturer?
Answer is Sarees are treated as fabrics and a saree remains fabrics only as no new item emerges having distinct name, character and use. Stitching of two or more different kinds of fabrics also does not take away its classification. Therefore, the sarees whether embroidered or not would be taxed at the same rate at which the fabric is taxed.
If Saree made various types of fabric like cotton, synthetic, man-made fabric, mixture of cotton and other fabric than tax rate is applicable on sale value it's applies only to garments and not for Saree.
5) GST on Dress :
Dress sets are classified under heading 6307 and the rate of tax on the dress materials/patterns is similar to the apparels i.e. for dress material of sale value not exceeding Rs.1000/-, tax at 5% would be charged and for dress material of sale value exceeding Rs.1000/-, tax at 12% would be charged.
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