GST on embroidary Sarees

New Delhi, August 1: A clarification was issued yesterday. The tax department has said that Sarees, whether designer or embroidered, will attract a five per cent Goods and Services Tax (GST).

Earlier there was some confusion regarding the tax rates on embroidery or designer sarees. People have raised a doubt that whether sarees will be treated as garments or fabric.

Central Board of Excise and Customs (CBEC) has given a clarification on this issue and said that "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, so they would be taxed at the same rate at
which the fabric is taxed".

Currently, 5 per cent GST is levied on job processes relating to the textile yarn (other than man-made fiber/filament) and fabrics.

The tax department also said that sale of old dhotis would be treated as worn clothing and will be taxed as apparel based on sale value.Whereas New Dhothi would attract 5 % GST.

Jute handbags and shopping bags would be taxed at 18 per cent. Currently, garments below RS 1000 would attract 5 % GST. Clothes above RS 1000 would attract 12 % GST.