Increase in GST rate on job work charges of dyeing and printing on Textile products from 01.01.2022
Earlier we had discussed about the increase in GST rate by centre in relation to textile products wherein GST rates for many textile products have been increased from 5% to 12% w.e.f. 01.01.2022. For more details on the same i.e. GST rate on which textile products have been increased CLICK HERE.
As we can understand such increase in tax rate has been done to remove the inverted duty structure and reduce refund under GST.
In the article mentioned above we had mentioned that GST rates have only been increased on the yarn and fabric but no GST rate has been increased for job work on such yarn and fabric. However, CBIC has issued another notification i.e. notification No. 15/2021 (Central tax rate) wherein they have revised the GST rate on job work of yarn and fabric as well.
In the said notification Dt. 18.11.2021 it has been mentioned at S. No. (ii) of the notification as under:
“(ii) against serial number 26, in column (3), in the heading “Description of Service”, in item (i), in clause (b), after the words, numbers, figures and brackets “Customs Tariff Act, 1975 (51 of 1975)” the words “except services by way of dyeing or printing of the said textile and textile products” shall be inserted.”
Thus, the above notification refers to Notification 11/2017 Dt. 28.06.2017 where serial number 26 clause (b) of item (i) deals with heading no. 9988 of the SAC code wherein GST rate was 5% as under
“i) Services by way of job work in relation to-
(b) Textile yarns (other than of man-made fibres) and textile fabrics;”
After the amendment by notification 15/2021 the above clause would be read as under:
“(b) Textile yarns (other than of man-made fibres) and textile fabrics, except services by way of dyeing or printing of the said textile and textile products“”
Thus, after the above notification the job work service of dyeing and printing on the textile yarn and fabric has been removed from 5% GST rate and now the same would fall under 12% rate or 18% rate depending on the person to whom services is provided. To read more you must refer to circular 126/45/2019.
Also, according to above notification other job work related service in textile would still fall under 5%, it can embroidery or job work on garments and even manufacturing of garments.
We hope that this will clear that now GST rate on yarn, fabric and even job work has been increased from the earlier rate of 5%.
The effective date of such increase in GST rate is 01.01.2022.
To read full notification CLICK HERE.
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