GST Effect on Indian Granite Industry
The recent implemented Goods and Service Tax (GST) in India with high rate of taxes has come as a severe blow to the granite industry, which is already in crisis with the decline in the exports to the international markets
The GST Council, which met in Srinagar, had announced a tax of 28 % on the polished granite and 12 % on the raw blocks.
Previously the finished polished granite tax structure is only 2 % and the raw granite is charged at 14.5 %. With the new implemented act imposition of 28 % of GST on the polished granite, could leads to decline in sales domestically and leads to doldrums of the granite industry.
The granite industry is struggling to run the business because of decline in exports and local consumption. With the imposition of 28 % tax on the finished granite products, the granite market would collapse completely because of the cost of the finished granite would escalate, there by providing burden on the customer. If the cost is increased, the customer would not prefer local polished granite and instead they prefer the cheaper alternatives i.e.,tiles coming from China.
The Indian Government had reduced the GST for raw granite blocks, but not for the polished granite. So the best slab rate for the granite industry is to be 12% .
Not only the consumption , the dependent employees also suffer a lot because of sales decline and there by loss of jobs consequentially. It also blow to the national GDP growth .
Becauase of high slab rate for the granite industry, the industry has cut down the production by nearly 50 per cent in May to July period.
Already the granite industry is struggling to sustain its existence after demonetisation and now the higher tax rate will ring death bells to the granite industry.
ranga rao m (www.varuntejaimpex.in)