Government of India
Ministry of Finance
Department of Revenue
(Central Board of Excise & Customs)
Subject : “Manufacture of Fabric” definition
It has been brought to the notice the Board that some commissionerates are not allowing exemption to double or multiple-fold yarn, if used in the manufacture of embroidered fabrics in terms of Sl. No. 1 of Notification No. 35/95 dated 16.3.95 on the ground that such embroidery yarn is not being used in “the manufacture of fabrics”.
The matter has been examined by the Board. The expression “manufacture of fabrics” as used at Sl.No. 1 in Notification No. 35/95 needs to be distinguished from “weaving of fabrics”. A wider meaning of the expression “manufacture of fabrics” will include, in addition to weaving, the processes like knitting, crocheting, embroidering etc., also Even after embroidery, the nature of fabrics does not change. Embroidered fabrics are also subsequently subjected to the process of bleaching, dying etc. As such, yarn used for embroidery cannot be said to have not been used in the manufacture of fabrics. In this view of the matter, it is hereby clarified that use of said yarn for embroidery of fabrics will be covered by the expression “manufacture of fabrics” for the purposes of Notification No. 35/95 dated 16.3.1995.
Do you think CBDT should extend Tax Audit Report and relevant ITR Due Date? Please Comment, Vote, Retweet and Like.— Tax Guru (@taxguru_in) September 18, 2018