Even as the GST for job working units in textiles has been cut from the proposed 18 per cent to five per cent, apparel, a major segment in the textile value chain, has been left out.

Garment exporters in Tirupur now want that extended to job working units in the apparel segment. They say levying 18 per cent on job work will create an inverted duty scenario disturbing the seamless credit flow thereby defeating the very objective behind GST. Since these job workers fall in the middle of the textile manufacturing value chain, where the credit would ultimately be passed on to the final manufacturer, there would be no revenue implication if the rates are kept at five per cent.

Only services which can be classified as job work in relation to yarn and fabrics of textiles are eligible for the reduced rate of five per cent.

In textile clusters like Tirupur a host of operations including garment printing, embroidery, garment washing, ironing and packing are carried out by micro industries on a job work basis. Some of these processes such as checking, ironing and packing and button fixing are actually carried out by people who do their job work at home.