20 October, 2020

Bearing The Brunt Under GST

The post-GST impact has wreaked havoc on small industrial units, resulting in widespread loss of business and jobs.

Photograph by G.C. Shekhar
Bearing The Brunt Under GST
outlookindia.com
2019-03-15T11:58:19+05:30

When a much-touted ease-of-business policy fails, even after a year, to fulfil its promise, it breeds helplessness and distress. J. James is not just worried for himself, but also for hundreds of small manufacturers in Coimbatore like him. The post-GST impact has wreaked havoc on small industrial units, resulting in widespread loss of business and jobs. James makes parts for companies that manufacture pumps, generators and motors. Since he sources his own raw material, he has been paying a GST of 18 per cent. Previously, he used to pay just 6 per cent VAT on his products.

Those who bear the brunt under the GST regime say even those who do job orders for firms—getting raw material and design and supplying finished product—are unfairly levied 18 per cent tax. Apparently, companies who sourced finished goods insisted that smaller suppliers must also enrol for GST, even though they fell under the Rs 20 lakh non-GST bracket (now raised to Rs 40 lakhs). Big firms argued that since they needed to claim input tax credit on their GST, even those doing job orders should...

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