Question : We are small traders of textile dealing in Suiting, Shirting, Sarees, Dress Material, Blankets, Dhoti etc. We have some queries regarding implementation of GST from 1st July 2017:
(a) What will be the status of opening Stock of Textile items? Will 5% be added on closing stock as on 30th June 2017?
(b) What is the GST rate in Fabrics, as there are various types of fabrics like cotton, synthetics, man-made fabrics, acrylic, Mixture of cotton and other fabrics etc. Will there be flat rate of 5% on all fabrics or different rate?
(c) Please provide clarification on HSN number. Is it mandatory to quote in invoice by B2C traders & B2B traders? Further there are various codes in one type of item, would it not create confusion among traders?
(d) As per news in CNBC, input tax credit would not be allowed in textile for some period? Please clarify.
(e) Is Rs 1000/- bracket for 18% rate applicable on Sarees and suit lengths or will it attract flat rate?
Answer:
(a) When you make supplies out of this stock after 1st July, 2017 you will be liable to pay tax as applicable to the goods sold by you.
(b) GST rate on fabric is flat 5% irrespective of composition.
(c) Upto Rs. 1.5 cr turnover, no HSN code is required to be mentioned. For those having turnover of Rs. 1.5 to 5 Cr, first 2 digits of the HSN code are required i.e. the chapter number. Only those who have turnover above Rs. 5 Cr are required to mention 4 digits of the HSN code. You will start getting the HSN code in your supplier’s invoice, so it would not cause any issues once the supplies under new regime take place.
(d) ITC would be admissible as per the Transitional provisions of GST Law.
(e) Rate of tax linked to the sale value applies only to garments and not for sarees and suit lengths which are fabrics.
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