Sarees, readymades to get pricier under GST

Sarees and personal care products are likely to get more expensive under the Goods & Services Tax (GST) framework.

According to the proposed tax rates, 5 per cent GST will be levied on garments and apparel of up to ₹1,000, beyond which they will be taxed at 12 per cent. The same rates will also hold true for other readymade apparel such as salwar kurtas , dresses, skirts, tops and jeans.

Further, synthetic and other manmade fibres will attract a higher tax of 18 per cent while other natural fibres (except silk and jute) will be taxed at 5 per cent.

This will also impact the cost of sarees.

“The prices of sarees will go up. We do not want GST on sarees. We want the earlier duty structure,” said Manoj Agrawal, President, Federation of Surat Textile Traders Association (FOSSTA). The higher GST rates will impact their margins, he added.

FOSSTA, along with many other textile associations, is on a strike against the new levy and has sought lower rates, if not a rollback of the levies before GST kicks in from July 1.

Till now, the Central Board of Excise and Customs did not consider sarees to be “made-up” or readymade garments. A 2 per cent excise duty is levied on ‘made-ups’ that cost over ₹1,000.

Most States also do not levy value-added tax on sarees or levy marginal rates.

Meanwhile, in a minor respite, items used by many married women such as kumkum, sindoor, bindis and bangles have been exempt from GST.

Normal kajal will also be exempt from GST, but kajal sticks will attract 18 per cent tax.

The tax on grooming and beauty-related services at salons will attract 18 per cent GST, against the current 15 per cent service tax.

But despite representations from women’s groups, the GST Council has levied the highest tax rate of 28 per cent on sanitary napkins.

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