GST may push up electrical goods’ prices by 10% to 15%
Traders bodies say 28% rate on such items will hit business
The selling prices of electrical goods may increase by 10-15% after the implementation of Goods and Services Tax (GST) affecting traders and customers, according to traders. Under the GST, electrical goods will be taxed at 28% as it has been classified as a luxury item.
“Electrical goods is not a luxury item, but an essential one,” said Hukmichand Shah, the president of 75-year-old Madras Electric Trades Association (META). “Taxing it at 28% will make it difficult for traders to survive and sustain. While the electrical raw materials are taxed at 18%, the finished goods is placed in the highest tax bracket of 28%.”
“The increase in operating cost and selling price is likely to have a cascading effect affecting both the small and medium traders and customers.
The Centre should consider the tax implication it might have on the end customers,” said Mr.Shah, who also heads the Federation of Electrical, Electronics and Engineering Trade Association of Tamil Nadu.
META has about 1,800 members in Tamil Nadu alone accounting for a consolidated turnover of ₹2,000 crore. Surendra Vyas, general secretary, META said they were not opposed to the implementation of GST but the manner in which it was imposed.
“There are several anomalies in the GST as far as electrical goods industry is concerned that has to be addressed on priority basis,” he said.
“This is not a peculiar problem for those in Tamil Nadu alone. My counterparts in New Delhi, Mumbai and Kolkata have already sounded the Centre about the anomalies in the rate. Memoranda have been sent to the Union Finance Minister, Finance Secretary and State Finance Minister,” Mr. Shah said.
Original Source: http://www.thehindu.com/business/gst-may-push-up-electrical-goods-prices-by-10-to-15/article19029761.ece#
Original Author: Special Correspondent
Original Date: June 13, 2017
