The Authority for Advance Rulings (AAR), Tamil Nadu has held that a salwar/churidar-kurta set comprising three pieces, top, bottom and dupatta which are just fabric or articles of apparels would attract 5% GST.
The authority clarified that a completely unstitched sets will be classified as ‘fabrics’ and attract five per cent GST, just embroidery or embellishment will not make any difference to it.
The authority also held that partially stitched churidars will make it ‘Article of Apparel’ for which 5 per cent (for sale value less than Rs. 1,000) or 12 per cent (for sale value more than Rs. 1,000) would be applicable.
Palayamkottai, Tamil Nadu-based RmKV Fabrics approached AAR to get an advance ruling on classification of three piece salwar/churidar-kurta-dupatta sets. The applicant put forward four models to determine ‘fabrics’ or ‘Article of Apparel.’ The first model has unstiched top and bottom where top is merely cut into size. The second model comprises top semi-stitched and bottom unstitched. The third model has top stitched, but bottom unstitched. Finally, the fourth model has top and bottom unstitched, but only the neck portion is cut and design is made — which meant partial stitching. However, in all the cases, the fabrics themselves could have some embroidery work/hemming or embellishments on them.
The applicant further said the sets in question comprise three pieces of fabric and in some of them certain degree of stitching or neck work is done. These items cannot be worn as such and requires further stitching according to the measurement of the user and then ultimately stitched into a complete set. They are essentially in the form of fabric and have not attained the characteristics of an article like a readymade shirt or pant.
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