Home / Knowledge / News / Textiles / GST Council lowers tax rate on textile job work to 5%
GST Council lowers tax rate on textile job work to 5%
12
Jun '17
Following pleas made by several textile bodies like The Southern India Mills’ Association (SIMA), the Goods and Services Tax (GST) Council has slashed tax rate on textile job work from the earlier decided 18 per cent to 5 per cent. This will benefit powerloom and handloom weavers, and processing and dyeing units that carry out production on job work basis.

In its request sent out to the Union finance minister Arun Jaitley, textiles minister Smriti Irani and other, SIMA said, “Over 80 per cent of manufacturing activities in textile industry are carried out on job work basis especially by powerloom weavers, handloom weavers, knitters, processing units, dyeing units and garment/made-up manufacturers.”

SIMA appealed for classifying all textile job works under 5 per cent GST rate to enable the job workers to take the input tax credit (ITC) on other inputs.

Welcoming the decision, Indian Texpreneurs Federation (ITF) secretary Prabhu Damodaran, said, "Our heartfelt thanks to finance minister and textiels minister and GST Council for this decision and this will help SME clusters like Coimbatore,Tiruppur, Erode and Karur in a big way to be inside the tax net and contribute to the nation by way of taxes at the same time without any big burden on tax outgo."
 
"The much required decision is a big relief to the Tiruppur knitwear garment sector as all the intermediate processes of garments are being carried out by job working units, mostly MSMEs and this has avoided the apprehension of job working units in blocking of working capital and the job working units would not be in a position to take input tax credit," said Tiruppur Exporters' Associaiton (TEA) president Raja M Shanmugam.
 
At its 16th meeting, the Council also increased the upper limit for the ‘composition scheme’ to Rs 75 lakh from the earlier Rs 50 lakh. Now traders and manufacturers with an annual turnover of Rs 20 lakh to Rs 75 lakh can opt for the scheme and pay tax at one per cent and two per cent respectively.
 
The ‘composition scheme’ exempts tax payers with an aggregate turnover in a financial year up to Rs 20 lakh — Rs 10 lakh in North-East and special category states — from GST. An entity whose aggregate turnover in the preceding financial year is less than Rs 75 lakh — earlier Rs 50 lakh — can opt for a simplified ‘composition scheme’ where tax will be payable at a concessional rate on the turnover in a state.
 
“The decision to lower rates was taken with the objective to maintain the equivalence with the current tax rates or due to the change in utilisation behaviour,” Jaitley told press persons after the meeting.
 
The higher upper limit for the composition scheme will help small and medium enterprises. “It eases the burden on these categories as they are mass job creators,” Jaitley said. “Similarly, to promote outsourcing in the employment-intensive sectors of textiles, leather, diamond processing and jewellery, the Council approved a rate of 5 per cent on job work,” he added. (RKS)

Fibre2Fashion News Desk – India


Must ReadView All

Courtesy: Fashion Revolution/Fashion Transparency Index

Fashion | On 23rd Apr 2018

Top global fashion brands now more transparent

Fashion Revolution’s Fashion Transparency Index 2018 reveals Adidas...

Japan’s clothing imports up 4% in fiscal 2017

Apparel/Garments | On 23rd Apr 2018

Japan’s clothing imports up 4% in fiscal 2017

Japan’s imports of clothing and accessories increased by 4 per cent...

PVH, WWF tie up to protect water bodies in Ethiopia, India

Apparel/Garments | On 23rd Apr 2018

PVH, WWF tie up to protect water bodies in Ethiopia, India

PVH Corp , parent company of brands like Tommy Hilfiger, Calvin...

Interviews View All

Divyesh Mashruwala
Akshar Industries

Surat dominates foiling, embossing and pleating

Hannah Lane
Redress

Encouragement from brands will motivate supply chains to become more...

Milind Khandwe
Hindoostan Innovation Centre

‘Modern technical textile is an indispensable tool for science and...

Vikas Banduke

Softech Controls Private Limited (SCPL) is a part of the Cotmac Group, an...

Sugandha Bhardwaj

<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...

Riddhi Jain

Conceived in Europe and curated in New Delhi, NeceSera is a...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


April 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.9%
No
12.6%
Skip
17.5%

Total Votes: 103

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
63.1%
No
29.1%
Skip
7.8%

Total Votes: 103

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.4%
No
8.7%
Skip
3.9%

Total Votes: 103

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
82.5%
No
7.8%
Skip
9.7%

Total Votes: 103


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search