‘Saree’ out of excise duty ambit; brings cheers to textile traders | Policy News India
Home » News » Policy News » Saree Out Of Excise Duty Ambit Brings Cheers To Textile Traders

‘Saree’ out of excise duty ambit; brings cheers to textile traders

Share: 
      Newsletter

READ MORE ON BudgetCBECPolicy News India

Saree

Image Courtesy: textileinfomedia.com

The Indian saree, whether it is made of six metres of fabric or undergone a designer makeover with embellishments and embroidery, will not face excise duty now as the Government of India has declared that the saree won’t be classified as a ‘Ready-made Garment’, which would have attracted tax.

It may be mentioned here that branded ready-made garments and textile products with a retail price of over Rs. 1,000 attract excise duty at rates of 2 per cent or 12.5 per cent, depending on the use of input tax credit.

According to a Central Board of Excise and Customs (CBEC) circular, “Saree which has undergone further processing such as embroidery, stitching of lace and tikka, etc. and stitched with two or more kinds of fabrics will be classifiable as ‘Saree’ under Chapter 50, 52 and 54 of the Central Excise Tariff Act, 1985 depending upon the material of the fabrics, and not as made-ups under Chapter 63 of the said Act.”

Also ReadJodhpur: After Furniture and Handicraft, Home Furnishing is the Growth Avenue

The circular further clarifies, “Each case may be decided on the basis of facts of the case and where further processing of ‘Saree’ does not change the essential characteristics of the fabric as that of ‘Saree’ , it should continue to be classified as ‘Saree’.”

It’s worth recalling here that in the Union Budget 2016, Union Finance Minister Arun Jaitely had imposed excise duty of 2 per cent on ready-made garments and made-up articles of textiles falling under chapters 61,62 and 63 of the Central Excise Tariff Act (CETA), 1985 and textile traders demanded to keep saree free from taxes.

It has been a matter of uncertainty for wholesale manufacturers as well as exclusive boutiques and designers because whenever a saree becomes a ready-made garment, it has garnered a number of tax disputes. Tax experts have said the clarification will ensure that sarees continue to enjoy exemption from central excise duty, which is extended to textile products.

 

Have some news? Let us know on news@apparelresources.com

Comments are closed.

Recommended by Apparel Resources

GST: Indian Govt. Rules Out Rate Revision for Textile Industry

The Indian Government has ruled out any scope of relaxation on Goods and Services Tax (GST) for the textile industry. Textile traders have...

Indian Govt. restores old rates for ROSL scheme

The Government of India has decided to continue ROSL...

Bangladesh Budget: Corporate Tax for RMG sector at 12%, Tax at Source 1%

In what may be termed as some reprieve to the readymade garment manufacturers of Bangladesh, the Government has lowered the Corporate Tax to...

GST gets mixed response from Indian textile industry

Goods and Services Tax (GST) will become the part of Indian taxation policy from 1st July, 2017. Despite several seminars and knowledge sharing...

India’s EPCH takes measures to ensure smooth GST roll-out

Goods and Services Tax (GST) will be effective from 1st July, 2017 and become one of the biggest taxation reforms in India… In a bid to ensure hassle-free execution of the...

Bangladesh will continue to get duty-free access to UK post Brexit

Even as readymade garment exporters in Bangladesh have been speculating on the fate of duty-free benefits (that it currently enjoys in United Kingdom)...

India imposes anti-dumping duty on sewing machine needles from China

The Union Finance Ministry of India has imposed definitive anti-dumping duty for a period of five years on sewing machine needle import from...

Textile industry clueless on draft of UP Textile Policy ’17

Draft of Textile, Handicrafts and Sericulture Policy 2017 has recently been approved by the Yogi Adityanath-led State Government in Uttar Pradesh, India. The draft is however not available in public...

Indian knitwear industry likely to get ‘special package’ soon

Indian knitwear industry might get to hear good news in around two months’ time as the Government is likely to announce a package...