New Delhi, August 3 (KNN) In an attempt to address the confusions over the different tax slabs for the textile industry under the Goods and Services tax (GST), the Central Board of Excise and Customs have released a report with clarifications to the queries from the sector.

As per the report, raw jute is kept under zero per cent tax slab. The suppliers dealing only in raw jute are exempted from tax, therefore they aren’t required to register either.   Also the jute mills are not supposed to pay tax under reverse charge mechanism.

The report however mentioned that the jute handbags and shopping bags are placed under the 18 per cent tax rate.

Likewise, the raw silk has also been kept under zero per cent tax rate under the GST. No registration is required by the suppliers that deal only in raw silk.

Cotton farmers are exempted from registration, whereas buyers of raw cotton from the farmers are required to pay tax on reverse charge basis.

According to the report, all goods that has sale value not exceeding 1000 rupees are placed under 5 per cent tax rate. Whereas commodities that are valued more than 1000 rupees are placed under the 12 per cent tax slab.

Also the Sarees are taxed at the same rate as other fabrics. Similarly tax on dress materials or patterns is same as apparels.

The report further said that the HSN code is mandatory to be mentioned for transactions over 1.5 crore turnover. For the turnover of 1.5 crore to 5 crores only first  2 digits of the HSN code is to be mentioned, whereas for value of over 5 crore as turnover, 4 digits of the HSN code is to be mentioned. (KNN/ DA)