Powerloom weavers lament 18 GST on jobwork

SURAT: Powerloom weavers are reeling under shock after senior officer of customs, central excise and service tax revealed there is 18% GST on any jobwork done on polyester yarn.

Until now, the powerloom weavers were under the impression that the weaving sector attracts 5% GST for manufacturing grey fabric from yarn. At the seminar organized by the Southern Gujarat Chamber of Commerce and Industry (SGCCI) on 'Impact of GST on weaving industry' on Thursday, deputy commissioner of customs, central excise and service tax, Sachin Singh clarified that any jobwork done on yarn attracts 18% GST. Noisy scenes were witnessed at the SGCCI's auditorium at Nanpura after Singh revealed the GST tax structure from yarn stage to traders.

"The yarn attracts 18% GST and any jobwork done on yarn also attracts 18% GST. The 5% GST is only on the finished fabric processed by textile mills and the end product sold by traders," said Singh.

Industry leaders stated that the 18% GST rate would collapse the powerloom sector. There will be huge loss in terms of input tax credit, which has no provision for refund under the GST law.

  

 

Ashish Gujarati, president of Pandesara Weavers' Cooperative Society Ltd, said, "This is bad news for the entire powerloom sector. Until now, we were under the impression that weavers will have to pay 5% GST. But, today we have received clarification that the GST rate is 18%. If this is so, the industry is certainly going to collapse."

Gujarati added, "The weavers doing jobwork will be finished. The master weavers were not giving jobwork to weavers after the announcement of GST rate, which was assumed at 5%. Now, you can just imagine the situation at 18% GST rate."

Source::: The Times of Indian, dated 21/07/2017