GST rate reductions on job work for manufacture of leather goods and footwear and CETP services
Members of the Council.
Sub : GST rate reductions on job work for manufacture of leather goods and footwear and CETP services
I am pleased to inform you that in the 25th GST Council meeting held on Jan. 18, 2018, the following GST rate reductions have been announced.
a) To reduce job work services rate for manufacture of leather goods (Chapter 42) and footwear (Chapter 64) from 18% to 5%
b) To reduce GST on Common Effluent Treatment Plants services of treatment of effluents, from 18% to 12%.
As per the announcement made by the Government, the aforementioned reduction in rates of job work and CETP services will come into effect from Jan. 25, 2018.
Besides, the following exemptions have also been announced as per decision taken in the 25th GST Council meeting.
(i) To exempt service by way of transportation of goods from India to a place outside India by air;
(ii) To exempt service by way of transportation of goods from India to a place outside India by sea and provide that value of such service may be excluded from the value of exempted services for the purpose of reversal of ITC.
The above exemptions on transportation of goods will be granted with a sunset clause upto 30th September, 2018.
You are kindly aware that CLE had been continuously representing to the Government at various forums for reduction of GST rates of items related to the leather and footwear industry, so as to reduce the financial strain on the industry and to ensure sustainable growth. You are also aware that as requested by CLE, the GST Council had earlier reduced the GST rates on finished leather from 12% to 5% and for leather goods/leather garments/saddlery items etc., and also leather chemicals from 28% to 18%. We are thankful to the Government for reduction of GST rates on leather industry related items.
Members may please note the above.