Big relief for textile traders as sari out of excise duty ambit

The Central Board of Excise and Customs (CBEC) have taken decision to keep ‘sari’ out of the ambit of made-ups, which attract 2 percent excise duty on retail price above Rs1,000. This decision brings a big relief for textile traders in the country’s largest man-made fabric (MMF) wholesale market in Surat.

The decision followed after a strong representation was made by Federation of Surat Textile Traders Association (FOSTTA) and Southern Gujarat Chamber of Commerce and Industry (SGCCI) to the government that sari is already classified in chapter 50,52 and 54 of the CETA Act 1985 and thus it should be kept out of chapter 63.

The textile traders were upset following the decision taken by the Central Government to levy excise duty on articles of textiles, including ready-made garments and made-ups above Rs1,000 in the Union Budget 2016, where Union finance minister Arun Jaitely had imposed excise duty of 2 per cent on ready-made garments and made-up articles of textiles falling under chapters 61,62 and 63 of the Central Excise Tariff Act (CETA), 1985.

The CEEC issued a circular dated March 15, 2017 for classifying ‘sari’ under chapter 50,52 and 54 of the CETA Act, 1985 and not under chapter 63, which attracts duty on the ready-made garments and made-ups.

FOSTTA president Manoj Agarwal said that the CBEC circular on keeping the sari out of the ambit of central excise duty levy. Now on the textile traders won’t have to pay any sort of duty on the retail price of sari above Rs1,000. This has come as a big relief for textile traders.