Q1.As per Chapter 53 heading 5303 of the GST rate schedule, raw just has been kept at the NILL rate slab. Thus, it is presumed that supplier dealing only in raw just is not required to register themselves under GST. But just, miles are asking their raw jute supplier to mandatorily register themselves else their supplier would not accepted. Please clarify whether raw jute supplier are liable for registration?
Ans - Raw jute has been kept at NILL rate of GST i.e. there would be no tax on jute .therefore, as per section 23(1)(a)of the CGST Act ,2017the supplier dealing only in raw jute are not required to register. Jute mile s are not required to pay tax under Reverse Charge Mechanism (RCM) as mentioned under section 9(4)of the CGST Act,2017 because raw jute is exempt from GST . Similarly, Raw Silk has also been kept at NILL rate of GST i.e. there would be no tax on raw silk. Therefore the supplier dealing only in raw silk is also not required to register.
Q2.Cotton under chapter heading 5201and 5203 has been kept in 5%rate slab. Does this mean that Cotton farmer’s required to register under GST?
Ans -No. As per section23 (1)(b)of the CGST Act ,2017 an agriculturist, to the extent of supply of produce out of cultivation of land is not liable to registration.
Q3. Does the buyer of raw cotton (who is registered person) from the farmer need to pay GST on Reverse Charge basis?
Ans -Yes. as the cotton under heading 5201 and 5203 has been placed under 5% rate and the cotton Farmer is not liable to registration, the buyer of raw cotton (who are registered person ) from the farmer are required to pay tax on reverse charge basics as per Section 9(4)of the CGST Act ,2017.
Q4. In Respect of goods classified under Chapter 61,62 and 63, the rate of tax for goods of sale value not exceeding RS1000/-is 5% and for those exceeding RS 1000/-12% .Is this value transaction value or MRP?
Ans-As per rate schedule, all good of sale value not exceeding 1000/-per piece would be taxed at 5%and the goods of sale value exceeding RS 1000/-per piece would be taxed at 12%. Therefore, it is sale value i.e. the transaction value on which the tax has to be paid and not the MRP.
Q5.No rates have been announced for jute bags and jute blended bags it is feared that they may be placed under Chapter 42 for leather wherein the rate of leather bags is indicated as 28%. It is suggested that the jute bags may be kept at zero %to promote production of green jute diversified products for combating and safe guarding environment?
Ans- The bags made of the jute are clearly specified in the rate schedule under heading 42022230.the rates for hand bags and shopping bags of jute is 18%.
Q6.Man made textile yarns have been kept at 18%while fabrics have been kept 5%. If buy yarn worth Rs100 by paying tax at 18% i.e. 18/- and I sell grey fabric at Rs 150/-considering 50% value addition by paying tax at 5% i.e. Rs.7.50, what will be the treatment of remaining input credit of Rs 11.50. Weather I would get refund of remaining credit and how much credit would I get?
Ans-You will be eligible for full ITC of Rs.18 paid on your inputs i.e. yarn but whatever credit remains unutilized will remain your electronic credit ledger and no refund of the same will be allowed.
Q7.We are a small saree manufacturer at Surat.We buy ready dyed fabrics and get job work , hand work stitching etc.Done to create designer sarees . Wholesalers and retailer from all over India buy these sarees on credit basis for 30th days to 240 days. I as trader have some quarries regarding implementation of GST from 1st July 2017:
(a)Whatever is sold 15-30%retured.what would be treatment of goods returned and how would adjust my taxability if the entire GST has already been paid?
(b)What would happen to my opening stock on 1st July 2017.wil I get input credit on it or do I just to supply it after adding 5%GSTon it?
(c)Is government assuring of payment within 180 days. There are rumors that the wholesaler /retailer have to pay within 180 days. Is it true?
(d)How will I make my invoice if a buyer under the composition scheme comes to buy our sarees?
(e)We are confuse about GST implementation as there was no tax on us before .will we get relaxation for the return filing.
Ans-(a) You can issue a credit note in respect of the goods returned and adjust your tax liability if the person returning the goods has reversed the credit availed by him at the time of original supply . such credit note cannot issued after September of the following year or filling of annual return whichever is earlier.
(b)Full credit of the tax paid on the stock would be available if the document evidencing tax payment is available. However, if only document relating to procurement are available no document evidencing tax payment deemed credit would be admission as your product was not unconditionally exempt from the whole of the duty of excise under the Central Excise Tariff, such credit would be available after the tax has been paid on supply of these goods .This facility is available for 6 month period only or till the date of sale of stock whichever is earlier and is limited to 40% of the central tax paid by you.
(c) As per the second provision to section 16(2)(d)of the CGST Act ,2017 if a recipient of the supply does not pay to its supplier the value of the supply along with the tax within 180 days from the date of issue of invoice by the supplier , the amount of ITC availed proportionate to the unpaid amount would be added to the output tax liability of the recipient of the supply along with the interest thereon. The credit so reversed can be reclaimed when the value is paid to the supplier along with the tax thereon. Thus the government is not assuring payment within 180 days.
(d) A normal invoice has to be issued irrespective of whether the buyer is under composition scheme or not.TH e difference would be only when you receive supplies from the person registered under the composition scheme.
(e)Relaxation in filing of return for the month of July and August, 2017has already been provided as per which for the first two month of GST implementation the tax would payable tax based on a simple return (FORM GSTR - 3B)containing summery of outward and in word supplies which will be submitted before 20th of the succeeding month. However the invoice wise details in regular GSTR -1 would have to be filed for the month of July and August, 2017 as per the timelines given below.
GSTR-2(Auto populated from GSTR -1)
BY 20th August
By 5th September
BY 20th September
By 20th September
21st -25th September
Q8.I has a manufacturing unit of cotton trouser where customer gives me fabric and I have to convert it into trouser. What would be the rate applicable on me 5% or 18%?
Ans-The services provided by you fall under category of job work by virtue of the definition of job work provided under section 2(68) of the CGST Act, 2017. The rate for job in relation to trouser, which is a wearing apparel, is 18%.
Q9.We are manufacturing floor covering falling under chapter 57, as per GST Council meeting dated 11.6.2017, the rate on coir mats , mattings and floor covering falling under chapter under chapter have been reduced from 12% to 5% .kindly clarify as to whether rate of 5% will be applicable and all type of mattings and floor coverings of chapter 57 or only to those made of coir ?
Ans – 5%rate will apply to only the specified item of coir.
Q10.We are manufacturing laminated textile under chapter 59.previousely, our product was exempted under notification no.30/2004-CE. But in state we were paying 4%VAT .Also we are doing job work of textile lamination for some customer. Our invoice value is sum total of raw material used for job work, labour charges and profit under GST regime.
(a)Whether we will get input credit material?
(b) How can we make invoice, which rate or we have to make two different invoices, one for material used for lamination and other for service charges?
Ans - (a) Yes. You would be eligible for credit of tax paid on material used for job work.
(b)No. You are not required to raise two different invoices. You would be raising one invoice Similar one to what you have been doing till now and GST at the applicable rate will be Charged on the invoice value. You can pay your tax liability by using Input Tax Credit (ITC).However; invoice should carry all the details as required by the CGST Act, 2017and the CGST Rules.
Q11.We are in furnishing fabrics industries for curtain and upholstery fabrics. We mainly deal in, woven knitted, polyester and coated fabrics .you are requested to help us to know the chapter number under which our fabrics as mentioned herein above are covered and GST rate applicable to us?
Ans-The woven fabrics are classified under the various heading depending upon their composition. The knitted or crocheted fabrics fall under chapter 60.polyester fabrics fall under chapter 54 and 55 and coated fabrics fall under chapter 59.
Q12.There is a gross confusion on the tax applicable for embroidered sarees and fabrics .typically principal manufactures supply fabric /sarees to job worker and get various embroidery design done on the fabrics and sarees .we understand that the textile job worker would change an output supply GST of
5% on the composite job work supply. This embroidery fabric /sarees are sold by the principal manufactures to wholesale and retail sellers. What would be the output GST application on such embroidered fabrics /sarees when the same is sold by the principal manufactures?
Ans-The rate of 5% would be chargeable on the job process relating to the textile yarns (other than man-made fibre/filament)and fabrics,saress are treated as fabrics and a sarees remain fabrics only as no new item emerge having distinct name ,character and use . Therefore, the sarees whether embroidery or not would be taxed at the same rate at which the fabric is fixed.
Q13.will the 5%fabric GST is applied or 12%GST on embroidery strips /badges the applicable?
Ans-Embroidery strips/badges (narrow woven fabrics) are classified underheading5810and chargeable to tax at 12%.
Q14. What is the difference between fabrics and made- ups? Whatever shawl is a fabrics or apparel or made-up? What is the rate applicable on shawl?
Ans-Shawls fall in the category of articles of appeal and clothing accessories and are classified under heading6314, if not knitted or crocheted. The rate if tax is 5%if the sale value of shawl does not exceed 1000/-per piece and the rate is 12%if the sale value exceed Rs.1000/-per piece.
Q15.Dress materials are sold by length. They can include up to 3 pieces. These can be plain or embroidered (value addition or further worked upon.)Where should dress material be classified ? Ans- Dress set are classified under heading 6307and the rate of Tax on the dress material pattern is similar to appeal i.e. dress material of sale of value not exceeding Rs.1000/-tax at5%would be charged and for dress material of sale value exceeding Rs. 1000/-tax at 12% would be charged .
Q16.Please clarify the ITC(HSN)yarn made from worn clothing , the material composition of which varies from lot to lot .it is uncertain as the clothing may be of cotton /woolen / man mad fibre?
Ans-Under HSN, the classification yarn is on predominance basis. so the yarn having predominant of wool would fall under chapter 51. If all kinds are in equal proportion i.e.no fibre is predominant it will gat classified in the chapter covering the fibre last in the numerical order, so chapter 54 or 55 in case MMF are present.
Q17.What would be the GST rate on old cotton dhoti used for cleaning purpose ?it is a used product recycled for cleaning purpose , is there any GST on old dhoti because there is no VAT on old dhoti?
Ans-Dhoti is classified under chapter 52or chapter 54 as fabrics. Old dhoti is clasiable under heading 6309as wom clothing. The tax for chapter63i similar to appear land related to sale value whereas cotton fabrics/manmade fabrics, irrespective of value are taxed at 5%whatever be the classification as presumably the old cotton dhoti would be below the sale value of RS.1000/-per piece, would be taxed at 5%.
Q18.we are small trader of textile dealing in suiting, shirting sarees, dress material, blanket dhoti etc
We have some quires regarding implementation of GST FROM 1ST JULY 2017?
(a)what will be the status of opening stock of textile items ?will be 5%added on closing stock as on 30th June 2017?
(b)what is the GST rate In fabrics as there are various type of fabrics like cotton synthetics, manmade fabrics , acrylic, mixture of cotton and other fabrics etc .will there be flat of5% on all fabrics of different rate?
(c) Please provide clarification on HSN number it is mandatory to quote in invoice by B2C trader &B2B trader? Further there are various codes in one type of item; would it not create confusion among traders?
(d)As per news in some business news channels, input tax credit would not be allowed in textile for some period? Please clarify.
(e)Is Rs.1000/-bracket for 18%rate application on sarees and suit length or will it attracting flat rate?
Ans-(a) when you, make supplier out of stock after 1st July 2017 you will be liable to pay tax as application to the goods sold by you.
(b)GST rate on fabrics is flat 5%of irrespective of composition.
(c) Upto Rs.1.5 cr.turnover no HSN code required t to be mentioned. For those having turnover of Rs1.5 to 5cr.first 2 digit of HSN code are required i.e. the chapter number only those who have turnover above Rs.5cr are required to, mention 4 digit of the HSN code, you will start getting the HSN code in your supplier invoice so it would not cause any issue one the supplier under new regime take place.
(d)ITC would be admissible as per the transitional provision of GST law.
(e)Rate of tax linked to the sale value applies only to garment and not for sarees and suilenghts which are fabrics.
Q19.Iam an unregistered trader dealing in textile fabrics which was exempted from tax under the state VAT Act. if I get registered under the GST Act will be eligible to avail of input Tax credit on my stock of goods lying in the appointed day?
Ans-Since the goods you are dealing with are exempted from tax under the state Act, you will not be eligible to avail input tax credit as SGST under the SGST Act, 2017on your stock of goods lying on the appointed day. But , will be eligible to avail CENVAT credit as central tax on your stock if you have invoices/prescribed document were issued not earlier than twelve month immediately preceding the appointed day your product was not unconditionally exempt from the whole of the duty of excise under the central excise tariff. if you do not posses invoices /other document evidencing payment of excise duty in respect of stock of goods, you will be allowed to avail input tax credit on good held in stock on the appointed day at the rate of 40%of the Central tax on your intra-state supply of good s after the appointed day or 20%of the integrated Tax on your inter-state supply of goods after paying Central tax /integrated Tax on such supply. You are allowed to enjoy the scheme for six months from the appointed day or till such stock is sold out, whichever is earlier and tax paid by you shall be credited as Central Tax in your electronic credit ledger.
Q20.I am manufacture of readymade garment. If send any input send to the job worker, will it be treated as taxable supply under the GST Act? Can I supply the goods after completion of job work from the peace of business of the worker?
Ans-You can send your inputs or capital goods to a job worker for job work without payment of tax and also bring back the same. After the completion of job work within one year or three years respectively. you can also supply the inputs and capital goods from the place of business of the job work subject to the condition that you have to declare the place of business of the job worker as your additional place of business if the job worker not a registered person .however if the inputs or capital goods, other than moulds and dies ,jigs and fixture or tools, which have been sent to the job worker are not receiver back within the specified time period, it shall be deemed that you have supplied the inputs or capital goods on the day when you have sent it to the job worker and you have to pay tax on such supply accordingly.