MSMEs approaches FinMin to exempt khadi from GST

India Infoline News Service | Mumbai | August 13, 2017 11:18 IST

Ministry of MSME has approached Ministry of Finance to consider the sector for an exemption from GST or to ensure a seamless flow of input tax credit to Khadi institutions, said a government release.

Ministry of MSME has approached Ministry of Finance to consider the sector for an exemption from GST or to ensure a seamless flow of input tax credit to Khadi institutions, said a government release.
At present only Khadi yarn produced in Khadi sector is exempted, while other Khadi products attract 5% GST.
The release said that the Ministry of Micro, Small and Medium Enterprises (MSME) welcomes the introduction of GST. The entire Khadi & Village Industries (KVI) sector has been enjoying the benefit of tax exemption even under the pre-independence era.
With the exemptions to the small scale sector being drastically reduced from the existing Rs 150 lakh to Rs 20 lakh, the exemption cover enjoyed by many of the Khadi Institutions (KIs) have been removed. KIs are now mandated to obtain registration under GST and also pay GST on various Khadi products at the rate of 5%. While the products of the Village Industries sector were either taxed at 0-14.30% before-GST and post-GST the same products attract tax at 12-28%, it added.

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