New Delhi, Nov 6 (KNN) According to a report by IHS Markit, the manufacturing sector in the country has slowed down in October because of the grey areas in the implementation of Goods and Services Tax (GST).

The growth in the sector lost momentum in October, the output has risen only fractionally with new orders been stagnated over the month decreasing both purchasing activity and pre-production inventories, the report observed.

Aashna Dodhia, economist at IHS Markit and author of the report said that manufacturing production rose at the weakest pace in October and Inflows of new orders has been stagnated as the negative effects arising from the implementation of GST continued to dampen demand levels.

The overseas demand for Indian goods has also dipped to the greatest extent since September 2013.

C.K Mohan General Secretary, Tamil Nadu Small and Tiny Industries Association (TANTSIA) told KNN that the major reason behind the current stagnant manufacturing is GST which has reduced the demand in the market.

The companies especially in engineering industry had to face high taxes and tariffs under GST regime which had increased their manufacturing cost.

He added that due to shortage of credit and liquidity and loss of working capital due to GST, MSMEs have their reduced manufacturing.

He suggested that in order to boost manufacturing, the government should simplify the GST registration and filling process and tariff should be lowered under GST. (KNN/AG)