In the Budget for FY 2016-17, the Government of Rajasthan (GOR) has introduced VAT @ 5.50% on Semi Stitched Garments including w.e.f. 08-03-2016 along with a requirement of Form 40A (Road Permit) for importing these items from outside the state of Rajasthan.
After several representations being given to the GOR in this matter by the Industry, the Government has issued several notifications for giving relief to the Industry noted as below:-
1. Notification No. F.12(80)FD/Tax/2014-07 dated 06-05-2016 : Exempted VAT on Semi-Stitched garments for the period from 08-03-2016 to 31-03-2016;
2. Notification No. F.12(80)FD/Tax/2014-08 dated 06-05-2016 : The term Semi-Stitched Garments has been removed from S. No. 112 (covering Readymade Garments) of the Schedule IV (Rate of VAT 5.50%) of the Rajasthan VAT Act, 2003;
3. Notification No. F.12(80)FD/Tax/2014-09 dated 06-05-2016 : A new category comprising of “Semi-Stitched Garments, namely:- (i) Semi-Stitched Lehnga Sets and (ii) Semi-Stitched Salwar Suits, Kurta/Kurti” has been introduced at S. No. 25 of the Schedule VI of the Rajasthan VAT Act, 2003 with a special Tax Rate of 0.65%;
It has been further explained that – “Semi-Stitched” means garments having one or more part(s) that has been cut to shape and/or is partially stitched.
4. Notification No. F.12(80)FD/Tax/2014-10 dated 06-05-2016 : A composition scheme has been introduced w.e.f. 01-04-2016, under section 5 of the Rajasthan VAT Act, 2003 read with Rule 17A for the Registered Dealers engaged in sale of Semi-Stitched Garments – Rs. 1300/- for every Rs. 2 Lakhs or part thereof, of the Turnover of Semi-Stitched Garments;
5. Notification No. F.12(80)FD/Tax/2014-11 dated 06-05-2016 : A relief has been granted to the Dealers of Semi-Stitched Garments from applicability of the Road Permit (Form 47/ 47A) requirement for importing Semi-Stitched Garments within the state of Rajasthan from outside by removing the term “including Semi-Stitched Garments” at S. No. 40 of the said list of items covered under the Road Permit requirement.
It is important to note that the above benefits are restricted to Semi-Stitched Garments only and does not cover Other Readymade Garments in their purview.
For any help, query or assistance, you may send a mail to CA Ritul Patwa on rp@ritulpatwa.com or call on M – 09001231231.