How cut pieces of fabric will be classified under GST

CBEC clarifiesclassification of cut pieces of fabric under GST vide circular no.13/13/2017 dated 27th October,2017

Circular No.13/13/2017-GST

F. No. 354/129/2017-TRU
Government of India
Ministry of Finance
Department of Revenue
Tax research Unit
****

North Block, New Delhi
27th October 2017

To,
The Principal Chief Commissioners/Chief Commissioners/ PrincipalCommissioners/ Commissioner of Central Tax (All) /
The Principal Director Generals/ Director Generals (All)
Madam/Sir,
Subject: Clarification on Unstitched Salwar Suits – regarding.
1. Doubts have been raised regarding the classification of Cut pieces of Fabrics under GST.
2. It has been represented that before becoming readymade articles or an apparel, thefabric is cut from bundles or thans and sold in that unstitched state. The consumersbuy these sets or pieces and get it stitched to their shape and size.
3. Fabrics are classifiable under chapters 50 to 55 of the First Schedule to theCustoms Tariff Act, 1975 on the basis of their constituent materials and attract auniform GST rate of 5% with no refund of the unutilized input tax credit.
4. Mere cutting and packing of fabrics into pieces of different lengths from bundles orthans, will not change the nature of these goods and such pieces of fabrics wouldcontinue to be classifiable under the respective heading as the fabric and attract the5% GST rate.
5. It is requested that suitable trade notices may be issued to publicize thecontents of this circular.
6. Difficulty if any, in the implementation of the circular should be brought to thenotice of the Board. Hindi version would follow.

Yours faithfully,

Rahil Gupta
Technical Officer (TRU)

You may also like :

• Download the official circular no. 13/13/2017 issued by CBEC dated 27th October,2017