Sari out of made-ups realm; no excise duty on it: CBEC

17 Mar '17

2 min read

The Central Board of Excise and Customs (CBEC) has announced that sari will be kept out of the made-ups realm, which now attracts an excise duty of 2 per cent on a retail price of over Rs 1,000. Union finance minister Arun Jaitley had imposed the duty on made-up articles coming under chapters 61, 62 and 63 of the CETA Act, 1985 in Budget 2017-18.

The CBEC issued a circular saying that sari will be classified under chapters 50, 52 and 54 of the CETA Act, 1985.

"Representations have been received from the members of the trade requesting clarification regarding classification of 'sari'. The issue raised in these representations is whether the goods described as 'sari', which has undergone further processing such as embroidery, stitching of lace and tikki etc. and stitched with two or more kinds of fabrics is classifiable as 'sari' under Chapter 54 or as made-ups under Chapter 63 of the Central Excise Tariff Act, 1985," reads the circular.

The circular further adds that, "'Sari' has been specifically classified under Chapter 50, 52 and 54 of the Central Excise Tariff Act, 1985 depending upon the material of the fabrics. Further, even after stitching, embroidery work and fixing of falls etc., a 'sari' remains fabrics only as no new item emerges having distinct name, character and use. Stitching of two or more different kinds of fabrics also does not take away its classification from heading 50, 52 or 54."

Representations to keep sari out of the made-ups realm were made by Southern Gujarat Chamber of Commerce and Industry (SGCCI) and Federation of Surat Textile Traders Association (FOSTTA). (KD)

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