Business Standard

Garment units confused over GST on job work

- T E NARASIMHAN

The textile industry has approached the textile ministry for a clarificat­ion on the goods and services tax (GST) rates for the job works even as it tries to get a fix on the matter. The GST Council on June 11 said services by way of job work in relation to textile yarn (other than man-made fibre/filament) and textile fabrics had been brought down to 5 per cent from 18 per cent, T E NARASIMHAN writes

The textile industry has approached the textile ministry for a clarificat­ion on the goods and services tax (GST) rates for the job works even as it tries to get a fix on the matter.

The GST Council on June 11 said that services by way of job work in relation to textile yarn (other than man-made fibre/filament) and textile fabrics had been brought down to 5 per cent from 18 per cent.

But the textile sector suspects the job works including stitching, printing, and embroidery will fall in 18 per cent bracket. Their worry is: What if some processes are done after fabric is converted into garment? A senior industry representa­tive in Tirupur said the confusion was whether it would attract 5 per cent or 18 per cent in case the stitched garment was sent for job work for printing and embroidery

The Tirupur Exporters Associatio­n wants this clarified by the ministry.

Confederat­ion of Indian Textile Industry (CITI) Chairman J Thulasidha­ran said the industry was apprehensi­ve about the made-up and garment sector as the job works related to these come under the 18 per cent tax slab.

“This will have a serious implicatio­n for the cost escalation of the final goods of made-up and garments and will be uncompetit­ive in the domestic and internatio­nal market,” he said.

He wants them under the 5 per cent GST slab.

Specialty textile fabric like impregnate­d, coated, covered or laminated of cotton still remains under the 12 per cent GST slab, which is unsustaina­ble and will have a huge bearing on the final cost, he added.

 ?? BS FILE PHOTO ?? The GST Council on June 11 said tax on services by way of job work in relation to textile yarn and fabrics had been brought down to 5%, but the sector suspects it could fall in 18 per cent bracket
BS FILE PHOTO The GST Council on June 11 said tax on services by way of job work in relation to textile yarn and fabrics had been brought down to 5%, but the sector suspects it could fall in 18 per cent bracket
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