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GST Council reduces tax on man-made yarn to 12%; industry welcomes decision
L-R: Vanaja N Sarna, chairman of the Central Board of Excise & Customs; Dr. Hasmukh Adhia, revenue secretary; Arun Jaitley, Union finance minister; Shiv Pratap Shukla, minister
of state for finance; and Dr. Arvind Subramanian, chief economic adviser at the 22nd meeting of the GST Council in New Delhi on October 6, 2017. Pic courtesy: PIB
The Goods and Services Tax (GST)
Council, at its 22nd meeting in New
Delhi, took several decisions for the
benefit of the textile and apparel
industry. While GST rate on man-made
yarn was reduced to 12 per cent from
the earlier 18 per cent, the GST rate on
real zari was decreased from 12 per
cent to 5 per cent.
“The GST rate has been reduced
to 12 per cent from the earlier 18 per
cent on sewing thread of man-made
filaments, whether or not put up for
retail sale; all synthetic filament yarn,
such as nylon, polyester, acrylic,
etc; all artificial filament yarn, such
as viscose rayon, Cuprammonium;
sewing thread of man-made staple
fibres; and yarn of man-made staple
fibres,” an official statement said.
Making it easier for small and
medium enterprises (SMEs) with an
annual turnover of up to ` 1.5 crore, the
GST Council decided to allow these
companies to file quarterly income
returns and pay tax, instead of the
current provision of monthly filings.
At a press conference after the
GST Council meeting, Union finance
minister Arun Jaitley announced that
processing of refund cheques for July
exports would begin by October 10
and for August exports by October
18. He also announced the decision
to refund a notional amount for the
remaining months and later adjust
the amount in the e-Wallet that will be
implemented from April 1, 2018.
The Council also increased the
threshold for composition scheme in
GST from ` 75 lakh to ` 1 crore. This
step is expected to reduce compliance
burden on medium and small
taxpayers.
GST Council approves relief
package for exporters: The Council
also approved a relief package for
exporters, which includes improved
refund procedures, nominal GST
for procuring goods from domestic
suppliers, e-wallet facility to handle
cash blockage and exemption from
furnishing bond and bank guarantee
while clearing goods for export.
Exporters will now get refunds
from one authority only and have
been exempted from furnishing
bond and bank guarantee when they
clear goods, a finance ministry press
release said.
To prevent cash blockage of
exporters, the Council approved two
proposals, one for immediate relief
and the other for providing long term
support to exporters. Immediate
relief is being given by extending the
advance authorisation (AA), export
promotion capital goods (EPCG) and
100 per cent export-oriented unit
(EOU) schemes to sourcing inputs
from abroad as well as domestic
suppliers. Such players will not have
to pay IGST and cess on imports.
Also, domestic supplies to holders
of AA / EPCG and EOUs would be
treated as deemed exports under
Section 147 of CGST/SGST Act and
refund of tax paid on such supplies
given to the supplier.
Merchant exporters will now have
to pay nominal GST of 0.1 per cent
for procuring goods from domestic
suppliers for export, the release added.
Pre-GST goods can now be sold
till December 31: The Central
government has extended the
permis sion to display revised
maximum retail price (MRP) due
to implementation of GST up to
December 31, 2017.
“Considering the requests received
to extend the permission for some
more time it has been extended
to display the revised MRP due to
implementation of GST by way of
stamping or putting sticker or online
printing for a further period of three
months, i.e. up to December 31,
2017,” an official statement said.
South India Garment Association seeks uniform GST slab for apparel
The Bengaluru based South India
Garment Association has written
to Prime Minister Narendra Modi
requesting the government to
consider and remove 12 per cent GST
slab on apparel priced more than
` 1,000, and bring them under the
5 per cent rate.
Discrimination in transaction value of
apparel priced above and below ` 1,000
is negatively impacting the industry, the
14 | FIBRE 2 FASHION NOVEMBER 2017
association president Murli Lakhanpal,
and Anurag Singhla, chairman of the
body’s taxation committee, said in the
letter.
The association has also requested
removal of GSTR-1 and GSTR-2 to
reduce complication of forms. “Only
one form GSTR-3 submission is enough
to declare details of GST collected and
paid and the final monthly or quarterly
return must be made for easing to do
business,” the letter said.
In addition, the association has
requested placing of textile/fabric under
zero per cent slab to increase all-round
manufacturing activities to generate
more employment.
The garment body has also asked the
government to consider scrapping of
e-way bill as the required information
is being submitted in GSTR-3, which is
enough to track transactions.