Garment units confused over GST on job work
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.