New Delhi, July 8 (KNN) The rubber wood based plywood have been placed under the 28 per cent tax rate Goods and Services Tax (GST), the tax slab might soon become a reason for crisis in the industry.

Talking to KNN, Jose Chacko, a Plywood based entrepreneur, explained the situation. Majority of the factories that manufacture the plywood were out of the purview of excise since the annual turnover for most of the units is less than 1.5 crores. These units did business with the neighbouring states paying 2 per cent for the central sales tax.

From 2 per cent the manufacturers will have to pay 28 per cent which is going to be a big pain for the industry says Jose.

He further informed that the plywood these manufacturers produce are not of high grade and are used for items such as cable drums.

Since their produce is an intermediary product, it adds to the pain. For instance the cable drum manufacturer picks up material at 28 per cent, whereas the GST on cable drum is 12 per cent, thus there will be a problem in retrieving the costs.

Jose informed that different associations had already submitted representations before the GST council prior to the rollout itself, yet their demands weren’t heard.

Rubber wood based plywood is manufactured at different clusters in Haryana and Kerala and is considered to be a labour intensive industry. With high tax rates, the entire  cycle of the industry from employment to supply will get disturbed fears the manufacturer. (KNN/ DA)