Rationalise GST rates

Vijay C Roy

Tribune News Service

Chandigarh, June 25

Over 3 lakh Micro, Small and Medium Enterprises (MSMEs), which form the backbone of the North’s manufacturing sector, have their eyes on the Budget. Amid slowdown, they are expecting favourable reforms to boost the growth of the manufacturing sector. Though a revision of Goods and Services Tax (GST) rates is not part of the Budget, the industry also wants the taxes to be rationalised. The Tribune spoke to the industrialists involved in the manufacturing sector to figure out their Budget wish list.

Textile & apparels

The Rs 50,000-crore textile industry of North India has specialised manufacturing clusters — Ludhiana in Punjab, Panipat in Haryana and Baddi-Barotiwala-Nalagarh belt of Himachal. With countries such as Bangladesh and Vietnam overtaking India in the apparel sector due to free trade agreements with the US and Europe, local manufacturers wish for similar pacts to boost the exports, besides reduction in duty. “The government should reintroduce duty-free import of fabric up to 5 per cent of the Free-on-Board (FoB) value as import tariffs on textile inputs have been significantly increased from 10 per cent to up to 25 per cent for several fabric products in the last one year,” Apparel Export Promotion Council Chairman HKL Magu said.

Cycle industry

Ludhiana is the hub for bicycle manufacturing in the country. According to the Indian Bicycle Manufacturers Association, Ludhiana has been producing over 1.5 crore bicycles per annum with support of small and medium ancillary units. The manufacturers wished that the government should bring incentives to bring down the prices of entry-level products (cycles).  Also, there should be 18 per cent GST on raw materials and 12 per cent on finished bicycles.

Auto components 

As the demand for automobiles continues to remain under pressure for several months now, manufacturers of auto components expect steps to give a fillip to the sector. “The government should introduce a subsidy scheme for technology upgrade for MSMEs in the engineering sector on the lines of TUFs in textiles. It should bring down the GST on auto parts from 28 per cent,” said SC Ralhan, former president, Federation of Indian Export Organisations. 

Pharma sector

To boost the manufacturing of APIs or bulk drugs, the government needs to help create infrastructure of global capacities, said pharma representatives. In North, the units are concentrated in Baddi-Barotiwala-Nalagarh belt in Himachal Pradesh with an annual turnover of around Rs 40,000 crore. “The Centre should set up an ‘API Monitoring Cell’ to check prices and quality of imported and domestic manufactured ingredients. There should be budgetary allocation for MSMEs to conduct research and development,” said Arun Rawat, partner, Kanha Biotech.

Sports industry

The Rs 1,600-crore Jalandhar-based sports goods industry seeks a cottage status. Many of these units operate from homes by skilled workers. They want relaxation in labour laws and GST.