GST on textiles: Uniform tax rate through the entire chain is need of the hour

In a welcome move, the government has addressed the issue of fibre neutrality in the recently announced Goods and Services Tax (GST) rates on textiles.

Fibre neutrality was a long-pending demand from leading trade associations, export councils, and local trade bodies of textile-centric states, though the target has moved from fibre to fabric.

While being a highly decentralised sector, textile is the country's second-largest employment generator, involving multiple processes — from fibre to garment. The product changes lots of hands till it is ready to be worn by the consumer. The involvement of a large number of people in different processes – as traders, jobbers, and convertors – requires a uniform rate of tax through the entire chain of conversion from fibre to ready-to-wear fashion garment. This issue needs to be addressed by the GST Council. Currently, the GST rate on fabric is fixed at five per cent, while at the job stage – such as processing, embroidery or other value additions (each of these being a manufacturing activity by itself) – it is deemed to be a service and, therefore, attracts 18 per cent tax.

Read more

  • Share

POPULAR POSTS

RIL sees Reliance Retail, Jio as hyper growth platforms
by  B2B Desk, 2017-07-24 17:10:32
N Chandrasekaran gets down to business, could soon shut or sell off misfiring Tata companies
by  B2B Desk, 2017-07-24 17:14:39
Amazon Spent $3.2 Million in Second Quarter on Washington Lobbying Effort
by  B2B Desk, 2017-07-21 16:10:58
Reliance Jio, Airtel, Vodafone and Idea exchange sharp words at Trai open house on IUC
by  B2B Desk, 2017-07-21 16:11:11
HMD Global CEO Arto Nummela resigns
by  B2B Desk, 2017-07-20 14:28:50
Centre Allows ONGC to Buy Out Gov Stake in Refiner HPCL: Source
by  B2B Desk, 2017-07-20 14:29:01
Reliance Jio corners 9% active subscriber base, mostly from smaller telcos
by  B2B Desk, 2017-07-19 14:29:50

Follow on Insta

Subscribe now