Service tax collections from the fashion design industry are yet to take off because of the loopholes in the definition of the taxable entity.
Only five out of the 85 fashion designers listed with the Fashion Design Council of India, the apex body of fashion designers, have registered to pay the tax so far.
The reluctance of designers to register stems from the clause in the statute books where fashion designers who offer services such as designing, preparation of pattern incorporating the requirement of the client are covered, but tailors are not covered since they are only involved in stitching and not designing.
Says Vinod Kaul, executive director of the FDCI:
