Aviation MRO companies want 18% GST scrapped

The aviation maintenance, repair and overhaul or MRO industry has asked the government to create a level playing field by either abolishing 18% goods and services tax (GST) being levied on the sector or imposing customs duty on aircraft being serviced out of the country.

The industry has made a representation to the aviation ministry seeking an exemption from GST, arguing that it makes servicing aircraft in India costlier than abroad. Next week, it plans to approach the finance ministry.

“Zero rating for service tax/GST to Indian aviation MRO industry; or introduce customs duties equivalent to 25% to the value of the import of aviation MRO services,” the industry said in its representation.

The 18% GST, industry representatives said, has come as a blow to the sector which had turned competitive after exemption from customs duty on import of spares and abolition of value-added tax by Maharashtra, which houses 80% of the MRO units in India.

“The airlines cannot get a refund for GST paid to us because there is no provision for refund available on economy class seats, which form a substantial part of the airline capacity in India,” said Bharat Malkani, vice president of MRO Association of India.

“Under the service tax regime, airlines used to get refund, thus keeping cost of servicing low. Also, pre-GST, we paid zero VAT on spares in Maharashtra and service tax on labour.

Post-GST, it is 18% on combination of spares and labour. However, imports are not taxed at all.” Overseas MRO units have gained since the implementation of the GST regime, Malkani said, because there is no customs duty on getting a plane and its spares abroad and bringing it into India. “If customs duty on imports of MRO was 18%, the government would collect $180 million annually.

Indian MROs are paying 18% and all of us are in the red, as no one wants to place orders with us,” he said. In 2016, airlines spent about $950 million in aircraft maintenance and servicing, but only 10% of this business came to Indian MRO companies.

This was because Indian airlines sent their aircraft to countries such as Singapore, Sri Lanka, Nepal, China and Dubai due to the cost disadvantage in India, primarily due to higher taxes.

The GST regime, implemented from July, has led to an increase in cost of operations across industries, including aviation.

Source: https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/aviation-mro-companies-want-18-gst-scrapped/articleshow/61176655.cms

There should be no penalty on late filing until GST return gets smooth: GCCI officials

Gujarat Chamber of Commerce and Industry (GCCI) officials held a meeting on Saturday in the wake of the problem being faced by traders in complying with provisions of the goods and services tax (GST). They said that unless the provisions regarding filing of GST return were smoothed, there should be no penalty on late filing of returns.

GCCI president Shailesh Patwari said that in view of the festive season, last date of filing GST return, which is October 20, should be extended till October 31. Instead, he said the authorities have started imposing penalty of Rs 4,200 per day for late filing from October 14 itself. “Genuine traders are willing to file returns in time but the online system is faulty and it take at least four hours to file one return which delays in uploading the return but penalty is imposed for not filing,” he said. He said the amnesty scheme for removal of VAT should be extended till December 2017.

GCCI senior vice-president Jaymin Vasa said: “We are opposed to word ‘penalty’, because it is paid but not allowed as ‘expenditure’”. he said. He said the GST Council meeting invites should also be sent to trade representatives so that traders views should also be heard and considered. Waris Isani, VP of GCCI committee on GST/VAT said: “It is important to solve all procedural issues because of which genuine traders felt harassed.”

Source : http://indianexpress.com/article/business/economy/there-should-be-no-penalty-on-late-filing-until-gst-return-gets-smooth-gcci-officials-4890841/

Misinformation on GST in social media

Most of the complaints were in the hotel and construction industries: official

Many consumers have raised complaints due to misinformation on Goods and Services Tax in social media, according to V. Pandiraja, Joint Commissioner of Central Goods and Services Tax and Central Excise.

Addressing a consumer awareness meeting here on Tuesday, he said most of the complaints were in the hotel and construction industries. “In case of a non-air-conditioned restaurant, the tax ought to have dropped by 2%. However, consumers have not got the benefit. We are monitoring the reasons,” he said. Earlier, the Central government did not tax such restaurants. The State government levied 14.5% Value Added Tax on food served in these restaurants. The current GST levied on customers is 12%,” he said.

Mr. Pandiraja said that prominent focus had been provided to Section 171 of the Central Goods and Services Tax (CGST) Act, anti-profiteering rules.

The Central and State governments had issued a notification to set up an anti-profiteering agency in Madurai soon.

R. Karnan, president, Tamil Nadu Citizen Consumer Protection Centre, said that the ink used in most bills often faded.

He said that many furniture shops often resorted to providing ‘estimates’ or hand-written bills in order to evade tax. “The customer faces a problem,” he said. “We are left wondering if bills are fake because there is no mandatory GST number. Only estimates and quotations are given at furniture shops,” said S. Arunkumar, advocate and president of the Consumer Rights Protection Consortium.

A few petitions on levy of GST were submitted to the Joint Commissioner at the meeting.

Credit in TRAN 1 in respect of existing registrations

Advisory on claiming credit in TRAN 1 in respect of existing registrations.

25/09/2017

  • It has been observed that taxpayers are facing problem in claiming transitional credit in respect of existing registration under earlier laws of Central Excise, Service Tax and VAT.
  • When these registrations are mentioned in the TRAN 1 form in different tables, and transitional credit claimed against them, the tax payers gets the message of “processed with error” when they save such details. This happens because the application validates the furnished registration number under existing laws in TRAN 1 with the registration number mentioned in the registration/enrolment application.
  • Hence, to claim transitional credit in respect of earlier registrations one must first include them in his enrolment/registration details using the non-core amendment facility and then file TRAN 1.
  • While filing the application of non-core registration amendment, following care must be taken at the relevant places of application :
    • One should not use special characters (-, /) while adding Service Tax No. /Central Excise No./VAT/TIN on the Business details Tab.
    • One should ensure that no Duplicate e-mail or Phone No. is given for promoters/ partners or Authorized Signatories.
    • One should see that Service Accounting Code (SAC) provided during migration has been provided as per new service codes (and not the earlier ones).

One should ensure that the STD code is entered correctly in the field provided and it is not entered in the field for entering the local Telephone no.

Car Buyers To Bear Burden Of Additional Cess If Implemented Before Delivery Date

The implementation of the Goods and Services Tax in India in July this year, has received mixed reactions but the one sector that rejoiced was the automotive industry and for good reason. The GST rates did away with a lot of tax slabs that burdened the automotive companies for years and it most car and bike prices saw a big reduction. In fact Luxury cars and SUVs benefited a lot thanks to the cap in the tax. Under the GST rates, cars will attract the top rate of 28 per cent with a cess in the range of 1-15 per cent.

While small petrol cars with engine less than 1,200 cc attract 1 per cent cess, the ones with a diesel engine of less than 1500 cc will attract 3 per cent cess. Large cars with engines greater than 1500 cc and SUVs with a length more than 4 metres and engine greater than 1500 cc will attract a cess of 15 per cent. This is levied on top of the 28 per cent that is already in place, which adds up to a total of 43 per cent. This saw prices of SUVs tumble and automakers happily passed on the benefit to the customers.

Post July 1, several automakers passed on the GST benefits to its customers ranging from Rs 1,300 to Rs 10 lakh. Car-makers like Mercedes-Benz, BMW, Audi, JLR, Bentley, Hyundai et al offer high-end luxury SUVs in India. However, the GST Council recently suggested that the cess would be hiked by another 10 per cent, taking the total tax on these cars to 53 per cent, which is similar to what it was before. Of course, this will affect the sales of SUVs and Luxury cars as they’re all set to become expensive yet again; but it is the consumer that suffers the most.

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While now is the right time to buy a car, there might be challenges that might occur a few months from now. Consumers who buy the car now are faced with a dilemma of having to wait till the additional 10 per cent cess is applied or to buy it right away. Aarti Latkar, a software professional, had her eyes set on buying the Jeep Compass ever since the prices were announced. “It looks good and it’s within my budget too, so I definitely want to buy it, but if the delivery is in the next 2 to 3 months, do I have to pay that 10 per cent extra, even though I’ve booked the car well in advance?” and that’s one question that has been plaguing many a mind. Most the cars have a delivery period of close to 2 to 3 months and we expect the 10 per cent additional cess (over and above the 15 per cent) to be added by then. While we contacted Jeep India for an answer to Aarti’s question, the spokesperson said, “We haven’t officially decided yet on what to do in such a situation, but we will make an official announcement if there are any price revisions which occur due to the additional cess”

Honda India on the other hand says that “the consumer will have to pay the price of the car which is applicable on the day of delivery.” Which, plainly put means that even if the consumer decides to buy the car today and delivery is at a later date, by which time, the additional cess has been applied, the consumer will need to pay the amount which will be tagged as ‘outstanding’. While Honda ran a ‘Price Assurance’ campaign when GST was about to be introduced and mentioned that if the rates were below what it was charging, Honda will provide a refund to the consumer of the balance amount. However, things are different now. It might sound a bit unfair to makers of SUVs and luxury cars but was it an expected move?

Land Rover India too made it clear that prices of the new Discovery are post GST at 43 percent (28 percent basic plus 15 percent cess). It said that the “prices we not inclusive of the proposed increase in cess since that is not finalised yet. Price prevalent at the time of delivery of vehicle and not at the time of booking shall be applicable.”

Abdul Majeed, Partner, Price Waterhouse Coopers, said, “This was on expected lines. The Government wants to promote more and more small cars to decongest roads and it would have been better if this was announced at the time of GST tax rate on vehicles.”

There’s no doubt that this revision of cess does not bode well with carmakers as prices will be back to where they were before GST was implemented. Audi and Mercedes-Benz have already made their disappointment clear but we wait to find out about the final decision.

Source: https://auto.ndtv.com/news/gst-impact-car-buyers-to-bear-burden-of-additional-cess-if-implemented-before-delivery-date-1735410

Continue Reading : About GST India

Direct impact: Now we know who all took the biggest knock of GST

: India Inc is in the last leg of its earnings season for the quarter ended June 30, 2017. Every other consumer-oriented company is blaming destocking in the runup to the implementation of goods and services tax (GST) for tepid performance in Q1FY18.

However, Finance Minister Arun Jaitley on Sunday said the rollout of GST was ‘extremely smooth’ in the country. “It has been an extremely smooth turnover without any disruption,” he said.

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Here are 15 companies that took a hit from the new tax regim

Britannia Industries
FMCG major Britannia Industries posted 1.41 per cent year-on-year fall in consolidated net profit at Rs 216.12 crore for the quarter ended June 30, 2017 against Rs 219.21 crore in the corresponding quarter last year. Varun Berry, Managing Director, Britannia Industries in a release said, “It has been a good quarter in the face of challenging market environment and de-stocking in trade due to GST. While GST created a short-term impact, it is expectedgenerate a positive momentum going forward.”

ITC
Diversified conglomerate ITC reported 7.37 per cent rise in standalone net profit to Rs 2,560.50 crore for the first quarter ended June 30, 2017, driven mainly by revenue growth from FMCG and cigarettes business. It had registered a net profit of Rs 2,384.67 crore for the April-June quarter a year ago, ITC said in a BSE filing. “The company delivered steady performance during the quarter against the backdrop of a challenging business environment marked by continuing pressure on the legal cigarette industry, sluggishness in demand for FMCG products exacerbated by de-stocking in trade channels ahead of implementation of GST,” said ITC in a statement.

DaburBSE -1.39 % India
FMCG major Dabur India posted a 9.80 per cent fall in consolidated net profit at Rs 264.86 crore for the first quarter ended June on account of de-stocking by trade partners ahead of GST rollout. “Sales plunged in June across all consumer categories in view of the massive de-stocking by trade channels just ahead of the implementation of the GST. The overseas markets also continued to face severe headwinds with currency devaluations and economic turmoil in key geographies,” Dabur said.

Marico
Marico reported an 11.92 per cent fall in its consolidated net profit to Rs 235.94 crore for the first quarter ended June 30 on account of reduction in sales due to transition to the GST regime.

Emami
FMCG major Emami Ltd posted 98.16 per cent drop in consolidated net profit at Rs 1.04 crore for first quarter ended June 30, hit by destocking ahead of GST implementation in domestic market and overseas inventory correction. Emami Director Mohan Goenka said the first quarter is not representative of the business outlook of the company as apprehensions of GST led to substantial destocking in domestic market.

Asian Paints
Asian Paints registered 20.23 per cent decline in consolidated net profit to Rs 440.74 crore for the first quarter ended June 30, mainly on account of higher expenses. “The decorative business in India registered low single digit volume growth in the current quarter with the business getting impacted, especially in the month of June due to GST rollout from July 1,” Asian Paints Managing Director and CEO K B S Anand said.

Mahindra & Mahindra
The auto major reported a steep 20 per cent fall in net profit to Rs 766 crore in the June quarter as sales were crimped by GST transition while revenue inched up 3.3 per cent to Rs 12,335.56 crore. “We’ve taken full impact on the loss on account of GST. We’ve compensated our dealers for the pre-GST inventory. We’ve made an appeal to the GST Council not to let us lose this transition amount,” M&M managing director Pawan Goenka said.

Maruti Suzuki
Maruti Suzuki posted over 4 per cent rise in net profit at Rs 1,556.4 crore for the first quarter ended June 30 as high commodity prices and GST-related expenses took a toll on its bottomline.
“During the quarter, there was a one-off impact of compensation for dealers due to the tax loss incurred on vehicle stock at the time of switchover to GST,” Maruti Suzuki said.

Apollo Tyres
Apollo Tyres reported 72 per cent decline in its consolidated net profit at Rs 88.3 crore for the quarter ended June 30, due to pre-GST destocking by trade partners and higher expenses. The tyre maker had posted a net profit of Rs 315.54 crore during the same period of the previous fiscal. The company said the first quarter revenue in India was subdued because of the “pre-GST destocking by the company’s business partners, and confusion over switchover from III to BS IV emission norms in commercial vehicles.

Ceat
Ceat reported a 98.6 per cent fall in its consolidated net profit at Rs 1.38 crore for the June quarter due to destocking by trade partners ahead of the GST rollout and higher expenses.

Arvind Ltd
Textile and apparel player Arvind Ltd posted 22.55 per cent drop in consolidated net profit at Rs 56.75 crore in the quarter ended June 30. The company had posted a net profit of Rs 73.28 crore in the corresponding period of last year. “First quarter was a challenging quarter with GST implementation impacting demand in June … going forward, we believe GST will continue to have an impact on demand in the next few months as the wholesale (channel) adjusts to the new tax regime,” Arvind Director and CFO Jayesh Shah said.

Bajaj Electricals
Bajaj Electricals reported a decline of 10.36 per cent in net profit to Rs 20.50 crore for the first quarter ended June 30, 2017 as sales of its consumer products segment was impacted on account of GST rollout. “The performance of consumer products segment was impacted primarily on account of drop in sales ahead of GST rollout on July 1, 2017 and drop in margin as a result of one-time compensation that the company has to pay to its dealers/distributors for losses incurred by them on account of introduction of GST,” said Bajaj Electricals CMD Shekhar Bajaj.

V-Guard Industries
V-Guard Industries reported a 46 per cent decline in its net profit to Rs 23.25 crore for the first quarter ended June 30. The company said destocking by trade due to GST led to drop in volumes and consequent drop in margins.

Lupin
Drug firm Lupin registered 59.40 per cent decline in consolidated net profit to Rs 358.06 crore for the quarter ended on June 30, 2017. Commenting on the results, Lupin MD Nilesh Gupta said that the first quarter results have been below our own expectations due to higher than anticipated price erosion in select products like Glumetza, disruption on account of GST implementation in India and appreciation in the rupee.

Eveready Industries
Eveready Industries reported 39.36 per cent decline in standalone net profit to Rs 13.56 crore for the first quarter ended June 30, hit by de-stocking in trade channels ahead of GST implementation. The inferior first quarter performance was due to market conditions being impacted in the run-up to the implementation of GST, particularly due to a general trend of de-stocking in the trade channels, the company said.

Source: http://economictimes.indiatimes.com/markets/stocks/news/market-now-metal-stocks-among-most-active-stocks-in-volume/articleshow/59965499.cms

Continue Reading : About GST India

GST: Small biz grapple with drop in orders, shutdowns

Small businesses in the state are grappling with teething trouble as GST, the month old tax regime requires a slew of registrations and compliance measures.

For some, tax slabs have risen, and for others its an increase in compliance cost, resulting in SMEs scaling down production and grappling with tech issues.

Firecracker units in Sivakasi have halved their production post GST.

K Mariyappan, a fireworks factory owner from Sivakasi, said, “Barring 50 of the 800 odd factories in Tamil Nadu most producers had to pay a VAT of 14.5% . Under the new regime this has gone up to 28%, affecting them. They have reduced production, which in inturn will lead to a price hike,” he said.

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While firecracker units see an increase in tax as a deterrant, workers from the sector having a turnover of less than Rs 20 lakh say that they are seeing their biggest clients pass on orders to registered players.

“We have not seen any units shutting down, but have seen a 50% dip in orders. Tiny industries, which supply ancilliary products attracts an 18% service tax at each elevel of production. However bigger companies which offer end-to-end solution are preferred,” said Kathiresan G, proprietor, AKK industries which supplies parts to the defence sector.

Talking about the workers where digital illiteracy seems to be a hurdle for GST registration, CK Mohan, secretary, TANSTIA (Tamilnadu Small and Tiny Industries Association), said that economically underprivileged workers need a year’s time to settle into the new system.

“This could be one of the reasons for an insignificant increase in the number of registrations,” he added. Weavers on the other hand have seen many units being shutdown. Prakash Radhakrishnan, a Kanchipuram weaver says that of the 45,000 looms in the area, almost 30,000 have shut shop. These workers with intricate skills have inturn taken up low-paying jobs as cooks or porters, he said. Demonetisation, sharp increase in silver prices and fear of GST led to a drop in sales. “We have now started buying new material for weaving and prices have gone up by at least 10%. Sales in July dipped 20%. We expect saree prices to go up by a few thousands,” he added.

Tax consultants say there is still a lot of ambiguity and lack of understanding of GST procedures which is impacting small businesses.

“There isn’t enough clarity on classifications and even the GST helpdesk cannot answer these questions. We will know only when these classifications are challenged by the department,” said Arun Ravikumar, manager with a Big 4 consulting company.

SOURCE: http://timesofindia.indiatimes.com/business/india-business/small-biz-grapple-with-drop-in-orders-shutdowns/articleshow/59921143.cms

Continue Reading : About GST India

GST brings pain, paperwork to India’s online sellers

India’s new goods and services tax (GST) regime is causing widespread headaches for small merchants and the e-commerce companies they work with.

The GST, which went into effect 1 July, has been touted as the biggest tax reform since the country’s independence seven decades ago, aimed at replacing hundreds of regional and federal levies with a standardized national tax. But retailers are discovering the new system is anything but simple. They’re battling a dizzying array of documentation requirements and product classifications, which affect the percentage of tax charged, that threaten to choke businesses with bureaucracy. Thousands of small merchants have been dropped from e-commerce sites because they can’t meet the new requirements.

Seller Archit Agarwal is still struggling to get the new rules straight after months of preparation. The owner of A2A Trading sells imported wireless headphones on Amazon.com Inc.’s local site, but he’s scrambling to figure out how his existing warehouse stock should be taxed, how customer returns should be handled and how detailed record-keeping should be. In August, he’ll start filing three sets of monthly tax returns.

“The new system is overwhelming,” said the 32-year-old just days after the GST was put in place. The harried Agarwal was heading into a low-rise building in Bangalore to one of Amazon’s 16 pop-up GST Cafés. A sign outside advertises “Get GST compliant and sell online chinta-free,” and dozens of sellers have come to offload their ‘chinta,’ or worries , before the online giant’s panel of taxation experts.

The rate of GST varies depends on the product and service, ranging from zero to 28%, as well as numerous exemptions. For example, fresh milk doesn’t incur GST, cream attracts a 5% rate while butter and cheese are charged at 12%.

While merchants didn’t always comply with their tax obligations under the old regime, the consequences of not filing proper returns now are dire. Penalties range from fines of Rs10,000 ($155) to five years in jail. Those with large amounts of tax due will not be eligible for bail.

In the past weeks, e-commerce companies big and small have bounced thousands of non-compliant sellers off their websites. Some small businesses and restaurants have voluntarily dropped out because they can’t meet the new requirements.

Flipkart Online Services Pvt. Ltd, the country’s largest online retailer, said “close to 95%” of its 100,000 merchants are compliant, but the rest were removed before the GST kicked in. Rival Amazon said it would retain nearly all of its 200,000 merchants.

“Small e-commerce businesses are getting knocked out by GST,” said Ravjeet Singh of the Delhi-based MS Trading Co., which sells men’s t-shirts on both sites. “The changeover is complicated and the penalties for not paying timely taxes are so harsh that people are scared.”

Mumbai-based fashion e-commerce start-up Fynd said its sellers complained that the GST website had stopped taking registrations and was down, a sign of upcoming trouble. The site has dropped almost 10% of its 330 sellers.

“Merchants are seeking clarity on a number of vexing questions,” said Harsh Shah, the company’s co-founder. “They are also are not quite sure what happens in various scenarios like discounts or in bundled offers.”

Nevertheless, the e-commerce industry largely views the overhaul as paving the way for long-term growth. Businesses are no longer required to go to multiple agencies in different regions or pass through entry points in each region, where miles-long truck lines were common.

Companies like Flipkart and Amazon, which source products and locate warehouses at multiple locations for tax purposes, will be able to reduce costs as transportation expenses fall and deliveries arrive faster. “Online retail will be a lot more streamlined,” said Vivek Somareddy, an Amazon executive who has worked with merchants to prepare for the new tax.

The pain will last through the next few quarters, said Sampad Swain, co-founder and chief executive officer of Instamojo, an e-commerce platform that helps small businesses sell online. Only about half the 250,000 businesses that sell mangoes, umbrellas and cupcakes on his site are registered with the new tax website. But Swain expects the number of businesses on his platform to swell to one million in the next 18 months.

“Small businesses will find the going a lot easier under the new tax regime and this will become clearer as months go by,” he said. Bloomberg

Source : http://www.livemint.com/Industry/qaWbySrq4RgjtIpiw1sOvK/GST-brings-pain-paperwork-to-Indias-online-sellers.html

No action against lawyers, law firms for GST non-compliance, rules Delhi HC

The Delhi High Court has directed the Centre not to take any coercive steps against lawyers and law firms for not registering or complying with the Central Goods and Services Tax (CGST) Act, Integrated Goods and Services Tax (IGST) Act or the Delhi Goods and Services Tax (DGST) Act, till a clarification is issued by the appropriate governments.

The bench comprising Justice Muralidhar and Justice Pratibha M Singh also asked the Centre to clarify whether services of lawyers and law firms come under the GST, after concluding that there exists no clarity on whether all legal services would be governed by the reverse charge mechanism. The orders were passed on a petition by J K Mittal, owner of a Delhi-based law firm, seeking the quashing of notifications issued by the Centre and Delhi governments according to which GST is to be paid by advocates and law firms on all services offered by them, apart from representing clients in courts and tribunals.

The high court passed the directions after concluding there was prima facie merit that lawyers and law firms were faced with a genuine doubt regarding the legal requirement for registration under the new tax regime. The bench also said that if all legal services were to be governed under the reverse charge mechanism, there would be no purpose in getting registered under the CGST, IGST and DGST Act. In such a case, those seeking voluntary registration could anyway avail the facility under Section 25 of the CGST Act and the corresponding provisions of the other two laws.

The petitioner has claimed that for representational services, the client (receiver of the service) will have to pay GST as per the relevant notifications and also alleges that the Centre and Delhi governments have failed to follow the GST Council recommendation that lawyers and law firms should be exempt from registration requirements. The petition also says that the government notifications are not in consonance with the CGST, IGST and DGST Acts and Article 279A of the Constitution and will have a negative impact on the legal sector. It also questions the need to re-register a legal professional who has already been registered under the Finance Act of 2011 and asks for these lawyers to be exempted from such requirements.

The matter has been posted for further hearing on July 18.

Source : http://www.business-standard.com/article/economy-policy/no-action-against-lawyers-law-firms-for-gst-non-compliance-rules-delhi-hc-117071401106_1.html

Haryana plywood units to go on indefinite strike against GST

Intensifying their stir against the Goods and Services Tax (GST) , nearly 1,100 plywood units, including plyboard and peeling factories, across the state have decided to go on an indefinite strike from Friday.

Plywood manufacturers from the industrial town of Yamunanagar, which is home to over 1,000 units alone and considered one of Asia’s largest timber markets. Scores of plywood units in Kaithal, Rohtak and the NCR region are also going to join the indefinite strike.

The strike is going to affect nearly 90,000 workers employed in these units besides hitting about 1,000 timber merchants, transporters and labourers.

The plywood manufacturers are protesting against the 28 per cent GST on plywood, 18 per cent GST on raw material and 2 per cent market fee, alleging that the new tax regime will cost them heavily and it will be difficult to run the industry.

They alleged that since the implementation of GST, they are unable to sell their product and are left with no other option but to shut factories from Friday.

CLAIM SUPPORT FROM DELHI, PUNJAB, UP

Members of the All India Plywood Manufacturing Association said plywood manufacturers in Delhi NCR,Punjab,Uttar Pradesh and Uttarakhand have also extended their support to the strike.

“We cannot afford 28 per cent tax on plywood under GST besides 18 per cent GST on poplar and eucalyptus trees and 2 per cent market fee, and we have to close our units,” Devendra Chawla, president, All India Plywood Manufacturing Association, said.

“Before GST, we were paying about 15 per cent tax, including 4.2 per cent VAT (value added tax), on purchase of raw material. This will increase prices by about 24 per cent,” he said.

YAMUNANAGAR UNITS CONTRIBUTE 40% TO COUNTRY’S OUTPUT

Yamunanagar plywood units contribute about 40 per cent of total plywood production in the country. The manufacturers claim that annual turnover of all the plywood units is around Rs 1,200 crore on paper and annual collection of tax from Yamunanagar’s plywood industry is around Rs 117 crore.

But after the implementation of GST the plywood industrialists will have to reveal their actual income and expenditure following which the annual turnover will cross Rs 5,000 crore on paper, whereas the tax collection will jump around Rs 1,400 crore, the sources said.

Chawla, however, skipped the question about tax evasion by plywood manufacturers. “Tax evasion is more likely when taxes are higher. If the government will impose 28 per cent GST, the consumer will have to pay 40 per cent more. This will also encourage tax evasion even more.”

Members of the plywood association have already taken up the issue with Union finance minister Arun Jaitley and Haryana finance minister Capt Abhimanyu and demanded GST on plywood should be brought down to 18 per cent but to no avail.

“Now, we have decided to shut our units as we cannot run our factories if the government does not bring GST down to 18 per cent,” said Narendra Sethi, owner of a plywood factory .

Before the GST implementation, Yamunanagar units were producing more than 300 truckloads of plywood in 24 hours but after July 1 the production has fallen to below 100 truckloads, creating insecurity among workers.

“We will not be able to do anything if the plywood production does not resume. This is going to affect thousands of workers in plywood units here,” said Brij Lal, an electrician with a Yamunanagar unit.

Source : http://www.hindustantimes.com/india-news/haryana-plywood-units-to-go-on-indefinite-strike-against-gst/story-Ezc2UzYk0s4dUBDzBC4fvK.html