‘Saree’ out of excise duty ambit; brings cheers to textile traders | Policy News India » Page 2

‘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

Recommended by Apparel Resources

Myanmar strives to get tax relief for garment export

The local garment factories in Myanmar plan to export their own branded garments, according to Myanmar Garment Entrepreneurs Association (MGEA). At present, these...

India considers 100% FDI in retail

Indian Government led by Prime Minister Narendra Modi may ease norms to allow 100 per cent Foreign Direct Investment (FDI) in multi-brand retail...

Indian PM aims to make Khadi a global brand

Indian Prime Minister Narendra Modi wants to make khadi a global brand as it would help rural artisans to increase their income. The...

India slashes textile and garment export target

Indian Government has decided to cut down the textile and garment export target to US $ 45 billion for this fiscal from previous...

Punjab (India) Govt. to shut Khadi and Village Industry Board

Government of Indian state of Punjab is planning to close Khadi and Village Industry Board (KVIB). According to reports, staff of KVIB from...

Japan revises labelling norms for textile & apparel products

Consumer Affairs Agency of the Government of Japan has reportedly announced the partial revision of the quality labelling system for textile and apparel...

Council fixes 18% GST for textile machinery

Goods and Services Tax (GST) rate for textile machinery has been decided at 18 per cent by the GST Council of India at its two-day...

GST rates for textile industry deferred till 3 June

Goods and Services Tax (GST) Council – on its concluding day of meeting – has not decided the tax regime for the textiles...

Indian Government may increase MSP for cotton

India’s Union Agriculture Ministry has reportedly put forward a proposal to increase the Minimum Support Price (MSP) of cotton by Rs. 160 per...

Indian Texpreneurs Federation seeks uniform tax rates under GST

Since Goods and Services Tax (GST) has paved way for rolling out the new tax regime from July this year, Tamil Nadu-based ITF...