Corrugation box manufacturers oppose hike in GST

Blurb: Rate up from 12% to 18%

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Quote: Will hit price of apples

“Increase in the GST rate will have a spiraling effect on the price of apples and other fruits that are packed in these boxes.” – Surinder Jain, state president, Federation of Corrugation Box Manufacturers of India

Ambika Sharma

Tribune News Service

Solan, September 29

Corrugation box manufacturers of the state have opposed the move of the GST council to increase the rate from 12 per cent to 18 per cent on boxes made of paper and board.

The proposed to increase the GST on corrugation boxes was made during the 45th meeting of the GST council. Clarifying this increase, the council stated this was done to remove ambiguity and a uniform rate of 18 per cent had been proposed on all paper and paperboard containers, whether corrugated or non-corrugated.

The Federation of Corrugation Box Manufacturers of India, said it was unfair to enhance the GST on corrugation boxes, which were used in packaging of various commodities, including apples. State president Surinder Jain, said, “Increase in the GST rate from 12 to 18 per cent will have a spiraling effect on the price of apples and other fruits which are packed in these boxes.”

A representation was also given to the Union Finance Minister recently at Panchkula. The manufacturers are eying the state government to take up the matter with the GST council in its next meeting.

Jain said, “Corrugation box manufacturers have been battling abrupt hike in the price of kraft paper for the past two years. An increase of 6 per cent in the GST will effect our business.”

Investors said GST on corrugation boxes had been 12 per cent since its inception in July, 2017, and it was on a par with its major raw material — kraft paper and paperboard. Since kraft paper constitutes almost 76-80 per cent of the finished box, any hike in tax on boxes will subsequently increase the rate on boxes substantially.

“All items, for which corrugation boxes are used, such as fruits, vegetables, pharma items and liquor, do not fall under the ambit of GST. Hike in GST rate will increase price of these commodities and put undue burden on the manufacturers,” said Jain.

The manufacturers contended they owned micro-small and medium sector enterprises, with a large number of them being micro and small sector businesses. “The increase in GST will hit cash flow in the market. Earlier, 3 per cent cash flow of sales was required, but the new development will push it to 9 per cent, and no customer will offset this additional cost of finance.”