India: GST Rates for Textile Products
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India: GST Rates for Textile Products
Mumbai, India | Tuesday, 6th Jun. 2017  | By Textile Excellence
 231 Comments    2 Likes     25023 Views          Print   

There is some good news from the finance ministry for the keen watchers of the GST barometer in the textile industry. At the onset, the finance ministry decided that there will be no tax on silk and jute fibers. Also, apparels costing below Rs. 1000 will be taxed at 5 per cent.

 

Moderate rate was announced for the cotton sector too. Cotton and several natural fibers will be taxed at the rate of 5 percent. However, man-made or synthetic fibers will be taxed at 18 percent [Read more on the impact of 18% GST on Man-made and Synthetic fibre indystry].

 

 

The five percent GST rate on cotton was unanimously hailed by all sections of the Textile industry as a “progressive decision”. Ujwal Lahoti, the Texprocil Chairman expressed satisfaction for maintaining a low GST rate for cotton. He said, "The low rate (for cotton) will go a long way in serving the purpose of tax compliance. In addition, the government’s decision ensures that we will regain competitiveness in the world market.”

 

As a fore thought, he advocated that, “I request the government to specify drawback rates.  This will account for the un-rebated duties under GST. It will also help carry on with the Rebate of State Levies (ROSL) scheme. 

 

Industry insiders also opined that the government’s focus given to the domestic textile industry will definitely help push up exports. Also, industry’s dependence on the yearly budget announcements (sops) would diminish and would get a stable playing field that is business conducive. [ Read More: GST on Blended Spun Yarn ]

 

GST Rates for Textile Products:

Tax Free Textile Goods

a) Raw silk and silk waste

b) Wool, not carded or combed

c) Gandhi Topi, National Flag

d) Khadi Yarn

e) Coconut or Coir fibre

f) Jute fibres raw or processed but not spun

 

5% GST (Fibers and Yarns)

a) Silk yarn

b) Yarn of wool or of animal hair

c) Cotton yarn, other than khadi yarn

d) Cotton sewing thread

e) Vegetable fibres and yarns such as Flax, Hemp, Paper yarn

f) Embroidery or Zari articles

 

5% GST with no refund of ITC accumulation

a) Woven fabrics of Silk or Silk waste

b) Fabrics Wool or of animal hair

c) Cotton fabrics

d) Fabrics of other vegetable textile fibres

e) Fabrics of manmade textile filaments

f) Fabrics of manmade staple fibres

g) Knitted or Crocheted fabrics

 

Mix Bag (5% GST if Sale value below Rs. 1000, 12% GST sale value above Rs. 1000)

a) Articles of apparel and clothing accessories, knitted or crocheted

b) Articles of apparel and clothing accessories, not knitted or crocheted

c) Blankets and travelling rugs

d) Curtains (including drapes) and interior blinds; curtain or bed valances

e) Other furnishing articles, such as Bedspreads Counterpanes, Napkins, Pillow case, Table cloth

f) Worn clothing and other worn articles

g) Used or new rags, scrap twine, cordage, rope and cables and worn out articles of twine, cordage, rope or cables, of textile materials.

 

12% GST

a. Wadding and felt of Textile materials whether or not impregnated, coated, covered or laminated

b. Nonwovens

c. Rubber threads and covered yarns

d. Metalised yarns, imitation Zari yarns

e. All Carpets and Floor Coverings including mats

f. Woven Pile fabrics and Terry Towels

g. Narrow Woven fabrics

h. Woven fabric of metal thread and metallized yarn is taxable

i. Quilted textile products

j. Tyre Cord fabric of high tenacity yarn

k. Textile products and articles for technical uses (technical textiles)

 

18% GST (Fibres and Yarns)

a) Synthetic filament yarn such as Nylon, Polyester, Acrylic etc

b) Artificial filament yarn like Viscose rayon, Cuprammonium Rayon etc

c) Sewing thread of manmade filaments

d) Synthetic or artificial staple fibres

e) Synthetic or artificial filament tow

f) Yarn of manmade staple fibres

g) Sewing thread of manmade staple fibres

h) All Textile Machinery

 231 Comments    2 Likes     25023 Views          Print   
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Mr. DJ Gohain, Textile Excellence


June 12, 2017, 3:40 pm

GST REVISIONS On 11th June 2017 are as below:

GST on Job work reduced to 5% (from 18%) after issue was taken up by the industry representatives.
Besides, the duty on man-made and synthetic yarn has been slated at 18% while the duty on fabric is just 5%. This has resulted in an inverted duty structure, which will create accumulation of negative GST. Such accumulation will be considered as cost as it is non-refundable.
Consequently, cost of manmade and synthetic fabrics and apparels would increase and consumption would go down. This in turn would reduce cost competitiveness of manmade and synthetic value added goods. Industry pointed this out this to the competent authorities. However, their representation was not given due consideration. Ideally, a fiber neutral level playing field would have been a boost to the manmade fiber industries and its consumers.
Companies like Reliance Industries, Indorama, Wellknwon, Grasim as well as Surat based manmade and synthetic fiber processors would be greatly impacted. The government has however, agreed to reduce the GST on Coir mats, matting and floor covering to 5% from 12%.

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