GST Council is likely to discuss tax rate for the textile industry at a meeting scheduled to take place later this week. However, any official announcement on the same is yet to be made public.
According to media reports, Finance Minister Arun Jaitley will chair the meeting which is expected to be held on 5th of this month. The main agenda of the meeting is to review the implementation of the new tax regime rolled out on July 1.
The GST is a uniform taxation system which has eliminated 17 different taxes such as VAT, Service Tax, etc. For the textile industry, cotton, natural fibres and all kinds of yarns attract a 5 per cent GST.
All types of fabric also attract a 5 per cent GST. Man-made apparel (up to Rs. 1,000) will attract a 5 per cent tax rate and those costing above Rs. 1,000 will come under 12 per cent GST. Man-made fibre, yarn, and machinery come under the 18 per cent slab. Silk and jute fibres have however been exempted under the GST.
The issue of 18 per cent tax bracket has been a bone of contention between the Government and those related to textile job work. Additionally, traders want fabrics to be exempted from the new tax structure which has put this segment under 5 per cent.
Issues raised by the industry regarding the GST will also be taken into consideration during the meeting. If the Council decides to reduce the tax rate for the industry, it will be a huge relief for the entire textile value chain which has been protesting against GST since long.
