As per Chapter 53 heading 5303 of the GST rate schedule, raw jute has been kept at the NIL rate slab. Thus, it is presumed that suppliers dealing only in raw jute are not required to register themselves under GST. But Jute Mills are asking their raw jute suppliers to mandatorily register themselves, else their supplies would not be accepted. Please clarify whether raw jute suppliers are liable for registration?

Ans: The GST rate on raw jute has been kept at 0%, implying that there will be no tax on raw jute. Thus, suppliers dealing solely in raw jute are exempt from registration under Section 23 (1) (a) of the CGST Act, 2017, as per the Indian Central Board of Excise and Customs (CBEC).

Jute mills are exempt from paying tax under the Reverse Charge Mechanism (RCM) outlined in Section 9(4) of the CGST Act, 2017, since the goods have been held at a zero duty rate. However, note that bags made of jute are clearly specified in the rate schedule under heading 4202-22-30. The rates for hand bags and shopping bags of jute is 18%.

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