The Central Board of Excise and Customs gave clarifications and provided answers to the persistent queries of the textile fraternity, regarding the goods and Services Tax (GST), on different tax slab rates.
According to CBEC report, raw jute has been kept at NIL rate of GST and thus there would be no tax on it. The suppliers dealing only in raw jute are not required to register. Jute mills are not required to pay tax under Reverse Charge Mechanism (RCM) because both the goods have been kept at NIL rate of duty. Whereas, the rates for jute handbags and shopping bags are kept at 18 per cent.
Similarly, raw silk has also been kept at NIL rate of GST and there would be no tax on it. The suppliers dealing only in raw silk are not required to register. Also, the cotton farmers are not liable to registration, but the buyers of raw cotton (who are registered persons) from the farmers, are required to pay tax on reverse charge basis.
As per the rate schedule, all goods of sale value not exceeding Rs.1000 per piece would be taxed at 5 per cent and those exceeding Rs.1000 would be taxed at 12 per cent. It is the same value or the transaction value on which the tax has to be paid and not on MRP.
The sarees whether embroidered or not would be taxed at the same rate at which the fabric is taxed. Also, the rate of tax on the dress materials or patterns is similar to the apparels, meaning the sale value not exceeding Rs.1000 will be taxed at 5 per cent whereas apparels exceeding Rs.1000 will be taxed at 12 per cent.
NoHarmonised System of Nomenclature (HSN) code is required to be mentioned up to Rs. 1.5 crore turnover. For those having turnover of Rs. 1.5 to 5 crore, first 2 digits or the chapter number of the HSN code, is required. Only those who have the turnover above Rs. 5 crore are required to mention 4 digits of the HSN code.
