Textile industry urges GST council to lower tax on ‘job work’ for garments to 5%

By

Maverick Martins

Published
Jun 13, 2017

Textile industry has requested the GST council to lower the service tax on job work related to made-ups and garment sector to 5 percent as it feels the 18 per cent tax would escalate the prices of garments.

 
In a statement, Confederation of Indian Textile Industry (CITI) Chairman J Thulasidharan said the industry is apprehensive about the made-ups and garment sector as the job work related to these still comes under 18 per cent service tax slab.
 
He requested the Goods and Services Tax (GST) Council to reconsider this on an urgent basis and bring it under the 5 per cent slab.

In the current system, there is no tax on job work as it is considered a “subsequent process” in manufacturing of textile products and not a service. However, under GST there is 18 % duty. The duty should be on the product and not on the process. Hence, the industry wants the duty to be reduced to 5 %, said Thulasidharan added.
 
The Council had fixed the tax rate on job workers in textile, diamond processing, leather, jewellery and printing at 5 per cent, as against the normal 18 per cent GST rate for services.