Inverted tax structure on man-made fibre value chain goes

Tribune News Service

New Delhi, November 23

The government has notified uniform goods and services tax (GST) of 12% on man-made fibre (MMF), MMF yarn, MMF fabrics and apparels, thus addressing a long-pending demand of the textile and apparel industry.

12% Uniform GST from January 1

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• Uniform 12% GST has been notified for man-made fibre (MMF), MMF yarn, MMF fabrics and apparels, thus addressing a long-pending demand of the textile and apparel industry
• The new rates will come into effect from January 1. The apparel and textile industry has long said a uniform tax structure will help them target $20 billion in exports

“This step removes the inverted tax structure in MMF by bringing a uniform tax across all its categories. The move will reduce compliance burden, help grow the MMF sector and create more jobs,” said Commerce Minister Piyush Goyal.

The new rates will come into effect from January 1. The apparel and textile industry has long said a uniform structure will help them target $20 billion in exports.

The textiles and apparel industry had a long-pending demand — first under sales tax, then under VAT and finally under the GST regime — for the removal of inverted tax structure on MMF value chain. The GST on MMF, MMF yarn and MMF fabrics was 18%, 12% and 5%, respectively.