GST Council cuts Rates for Leather Goods and Footwear
During the 25th GST Council meeting held on January 18, 2018 the government has announced reduction of job work services rate for manufacture of leather goods and footwear from 18% to 5%. It also announced the reduction of GST on Common Effluent Treatment Plants services of treatment of effluents, from 18% to 12%. The rates of job work and CETP services will come into effect from January 25, 2018.
Additionally, it has announced exemptions for service by way of transportation of goods from India to a place outside India by air; and for service by way of transportation of goods from India to a place outside India by sea and provide that value of such service may be excluded from the value of exempted services for the purpose of reversal of ITC. The above exemptions on transportation of goods will be granted with a sunset clause upto 30th September, 2018.
Mention must be made that Council for Leather Exports (CLE) has been continuously representing to the Government at various forums for reduction of GST rates of items related to the leather and footwear industry. According to Mukhtarul Amin, Chairman CLE, “This has been done so with the objective to reduce financial strain on the industry and to ensure sustainable growth. As requested by CLE, the GST Council had earlier reduced the GST rates on finished leather from 12% to 5% and for leather goods/leather garments/saddlery items etc., and also leather chemicals from 28% to 18%.”