GST norms eased for textile job work, no registration for smaller units

Master weavers who coerce units with under Rs 20 lakh sales to get registered to face action

T E Narasimhan 

Chennai, 25 July

The Ministry of Textiles has clarified that GST registration is not required for job workers/ job units whose annual turnover does not exceed Rs 20 lakh. The ministry has also warned of action against master weavers who insist small job units must themselves GST registered.

The development comes after the ministry received various notices and representations from job workers saying that a few master weavers and grey cloth traders are insisting job workers and job working weaving units with turnover of less than Rs 20 lakh get themselves GST registered.

J L Balakumar, deputy director and officer-in-charge at the Ministry of Textiles said that GST registration is not required for job workers and job working units in case of their annual turnover (intra-state) does not exceed Rs 20 lakh, since there is a threshold exemption limit of Rs 20 lakh under GST.

Therefore, if master weavers or grey cloth traders insist on GST registration, the office will be constrained to take suitable action against them, Balakumar said in a circular signed by him.

P Kumaraswamy, secretary of the Coimbatore District Job Working Powerloom Unit Owners’ Association said that the notification comes as a great relief for powerloom units, which were under pressure from master weavers.

He noted, there are around 600,000 powerloom units in Tamil Nadu alone, but 80 per cent of them achieve a turnover of about Rs 10-12 lakh only.

"They (master weavers) have been insisting for GST registration, so we took up the matter to the Ministry and now it has been clarified," said Kumaraswamy, adding that the sector continues to be under pressure post GST implementation.

Kumaraswamy noted only 20 per cent of the units post GST are working, with very little job work flowing in from the master weavers, who are sitting with huge stocks they they aren't able to dispose due to non-availability of proper bills.

"We hope that everything will come back to normal within the next two months. GST is a good thing, it would help to streamline the system in the long run," said Kumaraswamy.