Textile Processing and Dyeing: GST, TDS and Cost Rules

This is the reference detail behind our Textile Processing and Dyeing page: GST on job work, zero liquid discharge, TDS and export schemes, and cost records.

Dyeing, bleaching, printing and finishing units in Tiruppur, Erode and Karur mostly work on fabric that belongs to someone else, for a rate per kilogram. The rate has to cover dyes, steam, water, effluent treatment and the batches that come back for reprocessing.

GST on job work, and the credit that builds up

A unit that buys dyes and chemicals at 18% and bills job work at 5% builds up input credit. A refund under the inverted-rate rule is limited to credit on input goods, and views differ on how it applies to job work, so take advice before making or relying on a claim.

Job-work procedure. The owner of the fabric sends it on a delivery challan without tax. Goods that do not come back within the time limit are treated as a supply. The owner reports the movements in Form ITC-04.

Zero liquid discharge

Dyeing and bleaching units in Tiruppur have had to run with zero liquid discharge since the Madras High Court's orders, and most treat their effluent through common effluent treatment plants. The Pollution Control Board's consent conditions for a unit decide what it must treat and recover. For costing, the point is that treatment is part of the cost of every kilogram processed.

TDS and export schemes

Customers who pay processing charges deduct TDS at 1% or 2% as for a contractor. Match what was deducted with your annual tax statement (Form 168) each quarter, and investigate missing entries with the deductor before claiming credit under the applicable rules; a reporting mismatch needs correction and evidence.

Garment and made-up exporters claim rebates under the RoSCTL (Rebate of State and Central Taxes and Levies) and RoDTEP (Remission of Duties and Taxes on Exported Products) schemes. Both have been extended in stages by notification: RoSCTL to 30 September 2026 or until its scheme for the next Finance Commission cycle is approved, and RoDTEP to 31 December 2026. Check the current end date before quoting a rebate in a price. A processor's rates are often negotiated against what the exporter earns, so it helps to know the rebate rates.

Cost records and cost audit

The Companies (Cost Records and Audit) Rules, 2014 list yarn and woven fabrics under textiles. Knitted fabric and garments are not in the listed headings, and a job worker's processing charge is not a listed product. A company that makes listed yarn or fabric is covered once it crosses the turnover limits. The Cost Audit Applicability Checker works through the tests. The cost audit page sets out the limits, forms and dates.

Before relying on this article

The law this article follows: GST as amended from 22 September 2025, the Income-tax Act, 2025 and the Companies (Cost Records and Audit) Rules, 2014.

Rates and limits change with each Finance Act and GST notification.

This article is a summary for planning, not advice for a particular unit. Refund of accumulated credit in particular depends on the facts and on how the rule is applied.

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