2019 (9) TMI 159 - HC - GST

Court orders affidavit on fabric tax rates with differing views on GST categories.

Manufacturers Traders Association & Anr. Versus Union of India & Ors.

The court directed the respondent to file an affidavit within four weeks regarding the reduction in tax rates on fabric items, with the matter listed for ... Rate of GST - Reduction in the rate - submission of the learned counsel for the Petitioner is that the GST Council has decided the rate of tax on fabric items - HELD THAT:- Learned counsel for the Respondent submits that he will take instruction in this respect and is presently instructed to state that the reduction of the rate is only related to cotton and natural fabric. List on 11.10.2019. Issues:Rate of GST on fabric itemsAnalysis:The petitioner relied on the minutes of the 15th GST Council Meeting to argue that raw silk and raw jute should be taxed at Nil rate of GST, cotton and other natural fibers at 5%, man-made fiber and yarn at 18%, all fabrics at 5%, apparels sold over Rs. 1,000 per piece at 12%, and apparels sold under Rs. 1,000 per piece at 5%. The Council also decided that no cash refund would be given for credit accumulation due to inverted duty structure at the fiber stage.The petitioner further referred to Agenda item No.4, where the council approved taxing all varieties of fabric at 5% instead of the proposed 12% rate and not allowing cash refund for any accumulated credit of duty due to tax inversion.The respondent's counsel stated that the reduction in the tax rate applies only to cotton and natural fabric. The court directed the respondent to file an affidavit within four weeks on this aspect, and the matter was listed for further hearing on 11.10.2019.