Duties Applicable on Textile and Apparel Products in India

Contents A.Custom Duty B.Domestic Duty

A. Custom Duty

Custom Duty Calculation for Textiles and Apparels (Example to Illustrate Duty Calculation) Basic Custom Duty and Countervailing Duty varies for different textile & apparel products. Assumption: In below calculation, BCD and CVD are considered as 10% and 12.5% resp. Particulars Rate of Duty Formula Amount (INR) Equivalent to Assessable ValueA1,000,000 Basic Custom Duty (BCD)10%B = A X 10%100,000 Sub-TotalC = A + B1,100,000 Countervailing Duty (CVD)12.5%D = C X 12.5%137,500Central Excise Duty Sub-TotalE = C + D1,237,500 Education Cess (EC)2%F = (E - A) X 2%4,750 Secondary and Higher Edu. Cess (SHEC)1%G = (E - A) X 1%2,375 Sub-TotalH = E + F + G1,244,625 Special Additional Duty (SAD)4%I = H X 4%49,785CST / VAT Value of Imported GoodsJ = H + I1,294,410 Value of Total Customs DutyK = J - A294,410 Total Customs Duty (in %)29.441%L = (K / A) %

Custom Duty on Fibres HS LinesSector Basic Custom Duty (BCD) Countervailing Duty (CVD) Total Customs Duty 50Silk Silkworm cocoons suitable for reeling and raw silk30%0%36.136% 5003Silk waste15%0%20.068% 51Wool/ Animal fibre / / Raw wool: greasy and other degreased15%0%20.068% / Raw wool: shown wool and carbonized30%0%36.136% Raw animal fibres and their waste15%0%20.068% 5104Garneted fibre10%0%14.712% 5105 (except )Carded, combed fibre (except other wool tops)10%12.5%29.441% Carded, combed fibre: other wool tops20%12.5%41.492% 52Cotton 5201Raw cotton10%0%14.712% 5202Cotton waste15%0%20.068% 5203Cotton, carded or combed30%0%36.136% 53Jute / Flax / Ramie 5301Flax and its waste30%0%36.136% 5302Hemp and its waste30%12.5%53.543% 5303Jute and other textile bast fibres and its waste10%0%14.712% 5305 Coconut, ramie and other vegetable textile fibres and its waste 10%12.5%29.441% 54Man-Made Filament Manmade filament10%12.5%29.441% 55Man-Made Staple Fibre Manmade staple fibre10%12.5%29.441%

Custom Duty on Yarn Total Custom Duty on yarn is %. Exception: On HS line 5511, i.e. yarn of man-made fibres, Basic Custom Duty is 10% ad valorem or specific duty subjected to the condition of whichever is higher as given below: HS Lines Basic Custom Duty (BCD) Countervailing Duty (CVD) Total Customs Duty (silk) (wool/ animal fibre) (cotton) (vegetable textile fibre) (man-made) 10%12.5%29.441% YarnDescription Basic Custom Duty (%) Specific Duty (INR/kg) Condition 5511 Yarn (not sewing thread) of man-made staple fibres, put up for retail sale / of synthetic staple fibres10%31whichever is higher of artificial staple fibres10%30whichever is higher

Custom Duty on Fabric Total Custom Duty on fabrics is %, if BCD and CVD are considered as 10% and 12.5% resp. and Specific Duty is not considered (except HS line , where BCD is 12.5%). Basic Custom Duty on fabrics is 10%/12.5% ad valorem or specific duty subjected to the condition of whichever is higher as given below: HS LinesFabric Type Basic Custom Duty (%) Specific Duty (INR/sqm) Condition 5007Silk10% Wool10%60-155whichever is higher Cotton10%0-200whichever is higher Vegetable textile fibre10% Man-made filament yarn10%0-150whichever is higher Man-made staple fibre10%0-185whichever is higher (except ) Wadding, nonwovens, etc.10% Rubber thread & cord; other12.5% Carpets10%0-110whichever is higher Special fabric10%0-210whichever is higher Coated10% Knitted10%0-100whichever is higher

Custom Duty on Apparel and Made-ups Total Custom Duty on apparel and made-ups is %, if BCD and CVD are considered as 10% and 12.5% resp. and Specific Duty is not considered. Basic Custom Duty on apparel and made-ups is 10% ad valorem or specific duty subjected to the condition of whichever is higher as given below: HS LinesDescription Basic Custom Duty (%) Unit Specific Duty Condition Apparel Knitted apparel10%INR/pc0-595whichever is higher Woven apparel10%INR/pc0-1,110whichever is higher Made-ups Made-ups10%- Exception: Blankets of wool10%INR/pc275whichever is higher Printed bed linen of cotton10%INR/kg108whichever is higher Bed linen of cotton, nes10%INR/kg96whichever is higher

B. Domestic Duty

Domestic Duty Calculation for Textiles and Apparels (Example to Illustrate Duty Calculation) Assume 10 tons of polyester filament yarn having assessable value of INR 100 per kg is sold by a seller with a profit of 5%. The Central Excise Duty and CST / VAT are considered as 12.5% and 5% respectively. *12.5% is for man-made staple fibre and filament ^VAT is levied by States and hence it varies ParticularsRate of DutyFormulaAmount (INR) Assessable Value A1,000,000 Central Excise Duty12.5%*B = A X 12.5%125,000 Sub-Total C = A + B1,125,000 Education Cess (EC)2%D = (C - A) X 2%2,500 Secondary and Higher Edu. Cess (SHEC)1%E = (C - A) X 1%1,250 Sub-Total F = C + D + E1,128,750 Seller’s Profit5%G = A X 5%50,000 Sub-Total H = F + G1,178,750 CST / VAT^5%I = H X 5%58,938 Value of Goods J = H + I1,237,688 Value of Total Tax Payable K = J - A237,688 Total Tax Payable (in %)23.769%L = (K / A) %

Central Excise Duty on Apparels and Made-ups As per Union Budget , following two changes have been made with respect to Central Excise Duty on apparel and made-ups products: o The Central Excise Duty of 2% has been levied on branded apparel and made-ups products with retail price of more than INR 1,000. o The tariff value of apparel and made-ups products has been changed to 60% of retail sale price. Thus, effective Central Excise Duty on branded apparel and made-ups products is 1.2%. For example: Consider a branded women top having retail sale piece of INR 2,000. Then, Central Excise Duty = INR (2% x 60% x 2,000) = INR 24 (i.e. 1.2%)

Domestic Duty Applicable on Textiles and Apparel Stage in the Value chainNature of Tax Cotton/ Silk/ Woolen Textiles Manmade Textiles Jute and Other Textiles Fibre Central Excise DutyNil12.5%Nil CST / VAT^0% - 5% Yarn Central Excise DutyNil12.5% Not Applicable CST / VAT0% - 5% Fabric Central Excise DutyNil Not Applicable CST / VAT0% - 5% Apparel & Made-ups Central Excise DutyNil / 1.2%* CST / VAT0% - 5% ^VAT is levied by States and hence it varies *1.2% is for branded apparel and made-ups products with retail price of more than INR 1,000 The duty applicable on textile and apparel products manufactured and sold in India is given below:

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