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Table of Contents
[F.No.354/320/2017-TRU]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Revenue)
New Delhi, the 14th November, 2017
Notification No. 44/2017 - Union territory Tax (Rate): Seeks to amend notification no. 5/2017- Union Territory tax(rate) dated 28.06.2017 to give effect to GST council decisions regarding restriction of ITC on certain fabrics.
GST: [TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]
G.S.R. (E).- In exercise of the powers conferred by clause (ii) of the proviso to sub-section (3) of section 54 of the Central Goods and Services Tax Act, 2017 (12 of 2017) read with section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017) the Central Government, on the recommendations of the Council, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.5/2017-Union Territory Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 714(E), dated the 28th June, 2017, namely:-
In the said notification, in the TABLE, for Sl. No. 6A and the entries relating thereto, the following entries shall be substituted, namely: -
| “6A | 5608 | Knotted netting of twine, cordage or rope; made up fishing nets and other made up nets, of textile materials |
| 6B | 5801 | Corduroy fabrics |
| 6C | 5806 | Narrow woven fabrics, other than goods of heading 5807; narrow fabrics consisting of warp without weft assembled by means of an adhesive (bolducs)”. |
2. This notification shall come into force with effect from the 15th day of November, 2017.
(Mohit Tewari)
Under Secretary to the
Government of India
Note: - The principal notification No.5/2017- Union territory Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 714(E), dated the 28th June, 2017 and last amended vide notification No. 29/2017- Union territory Tax (Rate) dated 22nd September, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1197(E), dated the 22nd September, 2017.
📚 Frequently Asked Questions (FAQs): Notification No. 44/2017 - Union Territory Tax (Rate)
Q1: What is Notification No. 44/2017 – UTGST Rate?
Answer:
It is a GST notification issued on 14 November 2017 that amended Notification No. 5/2017-UTT(R).
The notification revised restrictions on refund of accumulated ITC for specified textile products.
Q2: From when did this notification become effective?
Answer:
The notification became effective from 15 November 2017.
Businesses dealing in affected textile products had to apply revised refund rules from this date onward.
Q3: Did this notification block Input Tax Credit completely?
Answer:
No.
The notification mainly restricted refund of accumulated unutilized ITC under inverted duty structure for specified goods.
Businesses could still utilize eligible ITC against future output tax liability where possible.
Q4: Which textile goods were covered?
Answer:
The notification covered specified textile goods under HSN 5608, 5801, and 5806.
These included fishing nets, corduroy fabrics, and narrow woven fabrics.
Q5: Why did the government restrict ITC refunds?
Answer:
The restriction was introduced to manage inverted duty structure refund issues and reduce excessive refund accumulation.
The government also aimed to stabilize GST administration in the textile sector.
Q6: What is inverted duty structure?
Answer:
An inverted duty structure arises when GST paid on inputs is higher than GST payable on output supplies.
This creates excess ITC accumulation and leads to refund claims.
Q7: Were exporters also affected?
Answer:
Depending on supply structure and refund mechanism, some exporters faced indirect working capital challenges.
The practical impact varied across business models.
Q8: What is the importance of HSN classification here?
Answer:
HSN classification determines whether refund restrictions apply.
Wrong classification may result in incorrect refund claims, tax notices, or litigation.
Q9: Did the notification introduce new GST rates?
Answer:
No.
The notification mainly revised refund restriction eligibility and did not directly change GST tax rates on goods.
Q10: Why was the textile sector heavily affected by GST changes?
Answer:
The textile sector has long supply chains, varying tax rates, and significant working capital dependence.
Even small GST policy changes can create large operational impacts.
Q11: What happens if restricted refunds are claimed mistakenly?
Answer:
Improper refund claims may lead to GST notices, refund rejection, interest liability, or future litigation.That is why businesses should verify eligibility carefully before filing.
Q12: Is this notification still relevant today?
Answer:
Yes.
Although GST policies continue evolving, this notification remains important for understanding textile refund restrictions and inverted duty structure policy under GST.
Q13: Did this amendment apply across India?
Answer:
This notification specifically applies under UTGST law.
However, corresponding CGST and State GST notifications created similar nationwide effects.
Q14: Why do textile GST disputes continue even today?
Answer:
Most disputes arise from:
HSN classification,
refund eligibility,
inverted duty calculations,
and documentation gaps.
The textile sector remains one of the more litigation-prone GST industries.
Q15: Should textile businesses conduct regular GST reviews?
Answer:
Yes.
Textile GST provisions changed frequently after GST rollout. Regular GST reviews help businesses avoid refund disputes and compliance errors.
Businesses unsure about classification or GST applicability often seek expert guidance through GST Registration Services and professional GST advisory support.
Conclusion
Notification No. 44/2017 – UTGST Rate was an important step in refining GST refund policy for the textile sector.
The notification:
- revised refund restrictions,
- targeted selected fabric categories,
- addressed inverted duty structure concerns,
- and implemented GST Council recommendations.
In practical terms, its biggest impact was not tax rate change — it was working capital management for textile businesses.
Download PDF: Notification No. 44/2017 - Union Territory Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
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