Cut GST on rice mill machinery, demand makers

Vijay C Roy

Tribune News Service

Chandigarh, July 26

Perturbed over high GST rate on paddy processing machinery, the paddy equipment manufacturers of Punjab will meet on Saturday to discuss future course of action. The manufacturers would request Punjab Finance Minister Manpreet Singh Badal to take the issue to the GST Council meeting which is scheduled on August 5.

The manufacturers are seeking lower taxes under the GST regime. Under the GST, some raw material used in the manufacturing of rice-processing plants is placed under the 18-28 per cent bracket. Prior to the GST regime, it was 6-18 per cent. They also want that input tax credit should also be extended to them like other manufacturers.

There are over 200 rice mill machinery manufacturers in Punjab spread over Rajpura, Moga, Ludhiana, Tarn Taran, Amritsar, etc, and supply units across the country.

“There are certain raw materials purchased by us for making rice milling machines being taxed at 18-28 per cent under the GST which were earlier taxed at 6-18 per cent. Moreover, the GST on the sale of processing unit is 5 per cent. This will result in escalation of input cost by 9-10 per cent, thus making the business unviable. Further, under the GST Act, we are not subjected to claim input tax credit as we are classified under end users. We are suppliers to the millers who set up units and not end users. “said Balbir Singh, general secretary, Rice Mill Machinery Manufacturer Association, Punjab.

According to Balabir Singh, pulley used in a rice processing unit is now being taxed at 28 per cent, which was earlier 6.05 per cent. Similarly, bearing is taxed at 18 per cent (earlier 6.05 per cent) and brackets at 28 per cent(6.05 per cent earlier).

“We are going to meet on Saturday to decide future course of action,” he added.

Echoing similar sentiments, Balraj Singh, spokesperson for Rajpura-based Vishwakarma Machine Tools ( P) Ltd, said, “At this juncture, we can’t pass on the increase in the GST rates to the buyers. This will hit our bottom line. Also, small and medium entrepreneurs will find it difficult to sustain.”