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Nil GST on fabrics not feasible’:(Aftermath of GST)
Context: The government ruled out cutting tax rates for the textiles sector, saying a zero per cent GST on fabrics will break the input tax credit chain for the domestic industry and make imported items cheaper.
Introduction:
- Organised traders and unorganized sellers in the textiles sector have not been affected by the Goods and Services Tax, according to Minister for Finance, Defence and Corporate Affairs Arun Jaitley, who ruled out a decrease in the tax rate on the sector under GST.
- The Finance Ministry clarified that hotels with a declared tariff of less than Rs 7,500 per day would attract a GST of 18% and hotels with tariffs above that would attract GST of 28%, regardless of the star rating of the hotels.
Key points:
- Under the new taxation system that was rolled out on July 1, it was decided that garments under Rs 1,000 would attract a five per cent charge , while those above Rs 1,000 would attract a tax rate of 12 per cent. Also, a five per cent tax would be levied on fabrics with no refund of utilized input tax credit.
- Under the Goods and Services Tax (GST) regime yarn and fibres made from silk, wool, cotton or other vegetable fibres attract 5 per cent tax.
- GST pesticides attracted excise duty of 12.5 per cent in addition to average VAT rate of 4 per cent. Also there were taxes such as CST, Entry Tax, Octroi, etc.
- The GST rate on pesticides is 18 per cent
