Small job work units need not register for GST, Ministry declares

The textile ministry has issued a clarification saying that job work units with an annual turnover of less than Rs 20 lakh are not required to register for Goods and Services Tax (GST). It has also said that strict action will be taken against master weavers who are insisting relatively small job units and workers to register themselves under the regime.

The clarification was issued after the ministry received various notices from job workers alleging that some grey cloth traders and master weavers are enforcing job workers with annual turnover of less than Rs 20 lakh to register under GST.

The threshold exemption for GST is of Rs 20 lakh and hence job workers with turnovers less than this amount are not required to register under the regime, said JL Balakumar, deputy director and officer-in-charge at the textiles ministry in a circular.

Suitable action will be taken against grey cloth traders and master weavers insisting ineligible job workers to register for GST, said the circular as per a Business Standard report.

Powerloom units were under pressure from master weavers and the notification comes as a relief to them, said P Kumaraswamy, secretary, Coimbatore District Job Working Powerloom Unit Owners’ Association. He added that out of 600,000 powerloom units in Tamil Nadu, over 80 per cent have a turnover of around Rs 10-12 lakh.

Kumaraswamy also said that merely 20 per cent of the units are working after the implementation of GST as the job work flow from master weavers has reduced considerably. The master weavers do have stocks, but are unable to dispose them due to the lack of proper bills. He expects the situation to go back to normal in the next two months.