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Fri, Nov 24, 2017 | Last Updated 1:58 am IST

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Tamilnadu protest against crackers levy of a flat 28% GST

Tamilnadu protest against crackers levy of a flat 28% GST
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Chennai sources have stated that Tamilnadu’s firecracker manufacturing cluster around Sivakasi in Virudhunagar district has threatened to stop manufacturing by June-end in protest against the levy of a flat 28 % goods and services tax on fireworks. Meanwhile the industry, particularly small manufacturers, fears the tax reform will decimate the business even as Indian firecracker makers face competition from Chinese manufacturers. 

According to sources the cluster, estimated to generate total revenue of about Rs 2,000 crore, has 821 units, some of which are cottage factories operating out of small rooms. Till now, these manufacturers have been paying a value-added tax of 14.5% but enjoy exemption from central excise tax of 12.5%, as their annual turnover would typically be below Rs 1.5 crore. 

Tamilnadu protest against crackers levy of a flat 28% GST

Moreover the GST flattens this tax structure and brings the tiny units on par with large brands like Standard Fireworks and others. This is expected to result in a 50% increase in price of the final product, enough to dampen sales in the future, fear manufacturers. 

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