rate of tax on job work on garments under gst

[satbir singhwahi]

GST SERVICE TAX RATES 13A Service by way of job work in relation to

a) Textile Yarns (other than manmade fibre /filamant) & textile fabrics ------ 5% with full ITC

Whether job work for cloth dyeing, cloth knitting, stitching , embroidery all coverered by above rate?

[satbir singhwahi]

Sir

pls clarify rate of gst for job work for cloth dyeing, cloth knitting , stitching, embroidery.

[SURESH ASTEKAR]

As per Section 2(68) of the CGST Act, “job work” means any treatment or process undertaken by a person on goods belonging to another registered person and the expression “job worker” shall be construed accordingly. Therefore, the job work of cloth dyeing, cloth knitting, stitching, embroidery would get covered under the definition of "job work". The GST Council at its 20th Meeting on 5th August, 2017, has decided to reduce the rate of GST to 5% in respect of "Job work services in respect of the textiles and textile products (including MMF yarn, garments, made-ups, etc. falling in Chapters 50 to 63) reduced from 18% / 5% to 5%."

Therefore, the aforesaid job works of dyeing etc., would attract only 5% GST.

[satbir singhwahi]

Sir

Kindly clarify from which date this rate of 5% applicable for Job work for cloth dyeing, cloth knitting, stitching , embroidery , from 01.07.2017 or any other date.

[SURESH ASTEKAR]

This is only decision made by the GST Council. The Notification issued earlier prescribing the rates has to be amended. The effective date would be known only when the amending notification is issued.

AI Summary

Job work services in textiles now attract reduced GST rate after GST Council decision, effective upon issuance of notification. Job work such as cloth dyeing, knitting, stitching and embroidery is within the statutory definition of job work and falls under textiles and textile products; the GST Council has decided to apply a reduced GST rate to job work in this sector, with the rate becoming effective only upon issuance of an amending notification specifying the effective date and subject to the existing input tax credit framework.