READYMADE GARMENTS UNIT WHETHER EXCISE APPLICABLE

[satbir singhwahi]

Sir

Please clarify whether Ready made Garment unit are subject to excise in view of notification 36/2015 dt.17.07.2015.They purchase cloth made from cotton and polyster yarn.

[CSSANJAY MALHOTRA]

Dear Mr. Satbir,

As per the recent Notification No. 34/2015-CE dated 17.07.15, Excise is applicable on RMG if the input is exempted which holds true in your case as fabric is exempted from duty of Excise.

Wait till tomorrow, CBEC may come with amendment or clarification which may restore earlier provisions of Duty Exemption as was prevailing under 30/2004-CE dated 09.07.04

[satbir singhwahi]

Thks Sanjay Ji for timely reply . Pls update through your article as and when clarification comes.

[CSSANJAY MALHOTRA]

Dear Satbir ji,

Agreed with you and the amended Notification No. 37/2015 and CBEC Circular No. 1005/2015 issued on 21.07.2015 clarifies the issue and restored the position as it existed prior to 17.07.15.

I have met you long back in Ludhiana.

AI Summary

Excise liability on ready-made garments reversed after amendment and circular restored pre-existing exemption for textile inputs. An initial Notification treated outputs as dutiable where inputs were exempt, making garments from exempt fabric subject to excise. A later amendment and administrative circular restored the pre-change exemption framework, clarifying that exempt fabric acquisitions do not automatically make finished ready-made garments dutiable and reinstating the prior duty-exemption position.