Texprocil Welcomes 5% GST for Textile Job Work
The Cotton Textiles Export Promotion Council (Texprocil) welcomed the government’s decision to reduce GST rate for job work in the textile sector.the Goods and Services Tax (GST) Council, in its meeting last week, decided to cut the tax rate for job work for the entire value chain of textiles sector to 5 per cent.
Earlier, the GST for job works related to textile yarns, other than manmade fibres and textile fabrics, was 5%, while for manmade fibres yarns and made ups/ garments, it was 18%.
The reduction in the GST rate for job work in the made ups and garment sectors is welcome and as a positive measure which will bring down the costs for the textiles sector across the value chain. A majority of the manufacturing activities in the textiles sector take place through job work and the reduction in the GST rate has come as a huge relief for the said the chairman, Texprocil.
With regard to exports, the chairman added further that said the merchant exporters cannot benefit from the facility of exports under bond/ Letter of Undertaking (LUT). There is no enabling document prescribed so far by the government under which goods can be cleared by a manufacturer without charging IGST meant for exports by a merchant exporter against bond/lut
The chairman urged the government to introduce similar facility at the earliest so that the merchant exporters exporting under Bond/ LUT can get Igst-free goods from the manufacturers.