GST Clarification on Unstitched Salwar Suits – Circular No. 13/13/2017-GST
<h3><strong>Key Highlights from CBIC Circular No. 13/13/2017-GST</strong></h3><p>On <strong>October 27, 2017</strong>, the <strong>Central Board of Indirect Taxes and Customs (CBIC)</strong> issued <strong>Circular No. 13/13/2017-GST</strong>, addressing doubts regarding <strong>the GST classification of unstitched salwar suits and fabric cut pieces</strong>. The circular confirms that such products remain classified as <strong>fabrics</strong> under <strong>Chapters 50-55 of the Customs Tariff Act, 1975</strong>, with a <strong>5% GST rate</strong>.</p><h3><strong>1. Classification of Unstitched Fabric</strong></h3><ul><li>Before becoming <strong>readymade garments</strong>, fabric is often <strong>cut and sold in unstitched form</strong>.</li><li>Consumers buy these <strong>fabric sets or cut pieces</strong> and later get them <strong>stitched to their size</strong>.</li><li>Such <strong>unstitched salwar suits</strong> remain classified as <strong>fabrics</strong>, not apparel or garments.</li></ul><h3><strong>2. GST Rate for Fabric Cut Pieces</strong></h3><ul><li><strong>All fabrics (Chapters 50-55)</strong> attract <strong>5% GST</strong>.</li><li>There is <strong>no refund</strong> on <strong>unutilized input tax credit (ITC)</strong> for these products.</li></ul><h3><strong>3. No Change in Classification Due to Cutting & Packing</strong></h3><ul><li><strong>Simply cutting and packing fabric into different lengths</strong> does <strong>not</strong> change its classification.</li><li>Such pieces continue to be taxed as <strong>fabrics</strong>, not garments or apparel.</li></ul><h3> </h3><p><a href="https://cms.plasament.com/storage/chirag-singla/circularno-13-gst.pdf">circularno-13-gst</a><br> </p>