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29/09/2017 03:09pm

Machine tool MSMEs hit hard under 18% GST, sales dip by 40%

image Machine tool MSMEs hit hard under 18% GST, sales dip by 40%

New Delhi, Sept 29 (KNN) The newly rolled out Goods and Services Tax (GST) is proving to be fatal for the Micro, Small and Medium Enterprises (MSMEs) involved in the machine tools making sector as the product is placed under the 18 per cent tax slab, Chamber of Industrial and Commercial Undertakings (CICU) informed.

Talking to KNN, Upkar Singh Ahuja, General Secretary of CICU informed that with almost three months into the GST, the situation is moving from bad to worse for the MSMEs involved in machine tool business.

Ahuja said that the 18 per cent GST is too much for the products that used to be taxed at a lower rate under the previous regime.

He  further informed that the sector is already facing tough time due to the competition from rival countries including China in the global market.

At a time when China is selling at a much lower price, and the global demand already on a down ride, an 18 per cent tax rate is a disaster for the industry, he added.

Commenting on the overall situation, Ahuja informed that the machine tool MSMEs in Punjab do not have any support in the form of clusters, which other sector have. Also there is no focus support given to this industry, which is another reason for the sector not being able to cope up so far under the new taxation.

Citing figures, Ahuja said that the sales have dipped by over 40 per cent so far and is likely to go down further if the government do not take into considerations the woes of the sector.

In line with the concerns of other industries, CICU too echoed the problem of capital blockage under the GST wherein one has to pay the taxes first and then ask for the refunds.

The machine tool industry bodies have been raising the concern every now and then with the GST council as well as the finance ministry, but no positive step has been taken so far, he added. (KNN/ DA)

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