GST on garment job work may be lowered to five per cent from 18 per cent. Likely to be removed are anomalies where intermediate goods are taxed at the highest bracket than the tax on the final output. The cess rate on cigarettes may be hiked.

Currently, services by way of job works in relation to textile yarns (other than man-made fiber/filament) and textile fabrics attract five per cent GST. Other job works in relation to garments attract an 18 per cent levy. This may be streamlined and all job works, including for making garments from fabrics, may be brought under the five per cent slab. This would help the textile sector as the final product was taxed between 5 to 12 per cent.

In the textile category, silk and jute fiber have been exempted, while cotton and natural fiber and all kinds of yarns will be levied a five per cent GST. Man-made fiber and yarn will, however, attract 18 per cent tax rate. All categories of fabrics attract a five per cent rate. Man-made apparel up to Rs 1,000 will attract five per cent tax and those costing above Rs 1,000 will attract 12 per cent.