HPMA urged FM to reduce GST to 5% on Plywood

 (Trade suggestions for forthcoming budget)

GST on Plantation Timber or Farm Grown Wood: At present GST is applicable 18% on Poplar, Eucalyptus, Rubber, Melia Dubia species of wood which are grown by farmers in their own farm land. The other farm produces are either exempt or attract 5% slab. It is suggested to rationalize the tax rate. The farm woods are used by industries. Such woods are transported as far as 500 kilometers from the field of farmers and there are transit checks in between. The farmers have no such registration no. of GST. Therefore, RCM is the suitable form of taxation for farm grown wood. RCM mechanisism will restuce farmers’ hardships and bring ease of doing business.

The plywood in India is made from above mentioned type farm grown wood. Therefore, there is a strong case for plywood to be taxed @5% instead of 18%.

Relief to SMEs Prior to GST era SMEs were getting excise duty exemption for 1 Rs. 150.00 lacs (this monetary limit was from 2017- 08). Thus by now this would have been to 500 00 lacs. Suppose for this exemption we were not entitled for Cenvat which is to the tune of 40% thereby giving a clean exemption of 60% of the applicable tax. In other word Rs. 500.00 lacs (inflation adjusted for 2007- 08 to till now) SMEs were saving tax of 500 lacs x 18% x 60% Rs. 54.00 lacs per unit.

SMEs are dying and this is ground realities. The Govt. should compensate SMEs by way of interest subvention to the tune of 5- percentage point on their working capital as well as machinery term loan.

These are our humble submissions for the consideration of Honorable Finance Minister.

Through: The Assistant Commissioner CGST Yamuna Nagar

Date: 08.11.2024