The Central Board of Excise and Customs (CBEC) has said that Sarees – designer, embroidered or otherwise value added will attract 5 per cent GST. CBEC said sarees are treated as fabric and it remains so even after embroidery etc as no new item emerges having a distinct name, character and use.

“Therefore, sarees, embroidered or not, would be taxed at the same rate at which the fabric is taxed,” the board explained in reply to questions. Adding 5 per cent GST is levied on job processes relating to the textile yarn (other than manmade fibre/filament) and fabrics.

With regard to dress materials, the board clarified that if sale value is not exceeding Rs 1,000, then a 5 per cent GST will be levied and in cases where it exceeds Rs 1,000, a 12 per cent GST will be charged.

According to set Goods and Services Tax Council rates, all categories of fabric attract a 5 per cent rate. Manmade apparel up to Rs 1,000 will also attract 5 per cent tax and those above Rs 1,000, will listed under 12 per cent tax.

In regard to sale of old dhotis, the CBEC said it would be treated as “worn clothing” and will be taxed as apparel based on sale value. “As presumably the old cotton dhoti would be below the sale value of Rs 1,000 per piece, it would be taxed at 5 per cent.” With regard to new dhotis, tax rate will be 5 per cent, it said. Jute shopping and handbags would be taxed at 18 per cent under GST, the board clarified.

– Apparel and Textile News, Apparel Talk, Indian Apparel