Invoicing challenges plague jute sector

Barely hours to the roll-out of the goods and services tax (GST), the jute industry is grappling with invoicing worries in migrating to the new regime. Jute transactions are usually through commercial invoice, mandated by the office of the jute commissioner. Excise invoices wouldn’t do, as the freight amount is known only upon issue of railway receipts (RRs). However, under the Central GST and State GST rules, only a GST tax invoice may be issued; commercial invoices are not allowed.

Several changes need to be made in the billing module to make these GSTcompliant. So, the commissioner’s office issued a notification stopping all despatches from Wednesday till Monday, inclusive. “No bills would be accepted after June 30,” Dipankar Mahato, deputy jute commissioner, stated in the notification.

Indian Jute Mills Association (Ijma) has organised a meeting on Monday to discuss these billing modalities. Presently, sale of jute goods attracts value-added tax of five per cent and a jute cess of one per cent, an effective tax rate of six per cent. Mill owners are worried that after the GST roll-out, the commissioner’s office is likely to decline any release of payment on multiple GST invoices against a container or wagon load. Moreover, the GST invoices are unlikely to carry the RR numbers.

Ijma has urged that these billing issues be taken up with Ministry of Textiles, for flagging before the GST Council. The Council can recommend to the Centre to invoke Section 31 (1) of the Central GST Act, to notify jute products as a specified category which can be removed from a factory for supply to central entities through a challan. This would enable the manufacturers to raise a single tax invoice against railway or container receipts.