GST confusion hits industrial production in Ludhiana

GST Confusion

Ludhiana, the industrial town of Punjab, is witnessing a slowdown in production after implementation of the GST. While several industrial units are still seeking clarifications on the new tax regime, many others are demanding deemed input tax credit on old stock. “We are running our units on a single shift and are not doing any overtime as a number of clients whom we have to supply material, have no GST number. It is the same problem with the persons who supply us raw material. So business is being done in a restricted manner,” said Avtar Singh, President of Chamber of Industrial and commercial undertakings (CICU).

The effect of slow down was visible at the dry port where not less than 5000 containers used to be sent by exporters in ten days to be sent further ahead. However in July, not more than 500 containers have been sent till now. “Only those containers are being taken which have declaration of old stock or paid GST etc. Otherwise we cannot send the material ahead. So industrialists are still busy in getting paper work done and hence are sending limited containers,” said a custom agent Ludhiana dry port.

Gurmeet Singh Kular, President of Federation of Industrial and Commercial Organisation (FICO) said,”We are not getting much clarifications from custom department and this is the reason of limited containers being sent at dry port for export purpose post GST implementation.” He added, “We met Naresh Penumaka, Commissioner, GST, Ludhiana and asked him that deemed input tax credit on stock to bicycle industry should be allowed.” Kular argued that 70 per cent of the raw material used to make bicycles is duty paid and the same is embedded in the cost of component and hence industry should be given deemed ITC for that stock.”

Printing industry dealing with box making, however, has almost stopped its production because of confusion over GST. Kamal Chopra, President of All India Federation of Printer Manufacturers said, “While we make box, we use corrugated paper and folding paper for the same. Earlier, both were mentioned separately however in GST, only corrugated box has been mentioned at 12 per cent GST, while there is no mention of folding paper and hence we are in confusion as what will be the GST on folding paper. In the absence of this clarification, we are not able to make any bills and hence are not doing any production.”

He said that the association had already written to GST commissioner, Finance Minister and were waiting for a reply. In Ludhiana alone, out of nearly 700 printing units, about 500 work on box making and their work has come to a stand still, he added.

Source :


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