A large section of textile traders dealing in lenghas, unstitched salwar kameez and dress material are worried as they will have to reverse the entries of their sale as tax consultants have clarified that Goods and Service Tax (GST) on unstitched textile fabric priced above Rs 1,000 was 12% and not 5%.
Textile traders and tax consultants are confused over the issue of GST on unstitched salwar kameez and dress material because till date the traders were doing business by imposing 5% GST on these items and maintaining record accordingly to file the returns.President of Federation of Surat Textile Traders’ Association (FOSTTA) Manoj Agarwal said, “Majority of them have been charging 5% GST. We are going to seek advice of senior authorities in the GST commissionerate on Thursday.”Agarwal added, “Earlier, the GST Council had kept GST rate on unstitched fabrics at 5%. Now, the rate has been increased to 12% on products above Rs 1,000.”Market sources said the unstitched fabric is in demand across the country. Women and girls prefer buying unstitched dress material and then get it stitched as per their size.
“There is no clarity from the GST commissionerate over 12% GST on unstitched fabric. It is going to be tough for many traders to reserve the old bills issued at 5% GST,” former president of FOSTTA Devkishan Manghani said.