Gst registration?

Regarding your query about GST registration for weavers and the applicable rates for weaving, sizing, and labor contract works as of 2026, here is the information:

1. Is GST Registration Mandatory for Weavers?

• Turnover-Based Exemption: Registration is generally not mandatory if your aggregate annual turnover is below the threshold limit. For most states in India, the threshold for goods is ₹40 Lakhs (and ₹20 Lakhs for some special category states). If your turnover remains below this limit, you are not required to register under GST.

• Handloom/Handicraft Exemption: Many handloom products and handicraft items are exempt from GST. Additionally, there are specific relaxations for small-scale artisans who do not engage in interstate supply or e-commerce.

• When Registration Becomes Mandatory: You must register if:

  • Your annual aggregate turnover exceeds the prescribed threshold (₹20 Lakh or ₹40 Lakh, depending on your state).

  • You engage in interstate supply of goods (though certain handicraft exemptions may apply).

  • You sell your products through e-commerce platforms (e.g., Amazon, Flipkart).

2. GST Rates for Weaving, Sizing, and Labor Contracts (as of 2026)

The GST structure underwent changes in late 2025 (the "GST 2.0" framework), simplifying the slab structure.

• Job Work (Weaving & Sizing):

  • If you are performing "job work" (processing goods owned by someone else), the rate is generally 5% or 18%, depending on the specific category of goods and the eligibility for Input Tax Credit (ITC). Most textile-related job work has historically benefited from lower rates.

• Labor Contract Works:

  • Pure Labor Contracts: If the contract is for "pure labor" (e.g., manual labor provided without any supply of materials), it is generally classified as a service. Under current rules, this is typically taxed at 18%.

  • Exemptions: Pure labor services for specific government-notified schemes (like certain affordable housing projects under PMAY) are exempt (0%).

  • Works Contract (Labor + Materials): If you supply both labor and materials, it is treated as a "works contract" and is generally taxed at 18%.

Summary:

• Registration: Generally optional if your annual turnover is under ₹40 Lakhs, unless you conduct interstate trade or sell via e-commerce.

• Rates:

  • Job work (weaving/sizing) generally attracts 5% or 18% depending on the specific process and input eligibility.

  • Labor contract services typically attract 18%, unless they fall under specific exemptions like government-notified housing schemes.