Garment manufacturers have welcomed the government’s decision to cut service tax (goods and services or GST levy) on the third-party services popularly known as job work.The GST Council decided to cut the tax rate on services rendered by third parties from 18 per cent to 5 per cent. Earlier, the GST Council had lowered the rates on the job work in the jewellery sector while keeping the rate unchanged at 18 per cent on readymade garments.

“We welcome the decision. This is a major relief for the garments sector. The rate of 18 per cent was the biggest impediment for the growth of the garments sector. With this relief garment sector in India will see a major jump in coming days,” said Rahul Mehta, President Clothing Manufacturers Association of India.