Himachal's corrugated box makers rue hike in GST from 12 to 18 pc : The Tribune India

2021-12-27 21:09:48 By : Mr. Bertram Young

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Updated At: Oct 04, 2021 09:49 AM (IST)

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The Himachal Pradesh Corrugated Box Manufacturers have opposed the move of the GST council to increase the rate from 12 to 18 per cent on corrugated boxes made of corrugated, paper and board.

The 45th meeting of the GST council has proposed to increase the GST on corrugated boxes from 12 to 18 per cent on cartons, boxes, packing containers of paper, etc. The council while clarifying this increase has stated that this was done to remove ambiguity and a uniform rate of 18 per cent has been proposed on all paper and paper board container, whether corrugated or non-corrugated.

The Federation of Corrugated Box Manufacturers of India said it was unfair to enhance the GST on corrugated boxes which are used in packaging of various commodities like 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 commodities like apples and other fruits which are packed in these boxes.”

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

Jain added that, “The corrugated box manufacturers have been battling abrupt hike in the price of kraft paper for the last two years. An increase of 6 per cent in the GST rate of corrugated boxes will have a debilitating effect on our business.”

The investors said the GST on corrugated boxes has 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 increase the tax rate on boxes substantially.

“All users of corrugated boxes like fruit, vegetable, many pharma items, food items, liquor, etc., do not fall under the ambit of the GST. Hike in GST rate will, therefore, raise price of these commodities and result in undue burden on the manufacturers,” added Jain.

The manufacturers contended that they are MSME with a large number of them being micro and small sector enterprises. “This increase 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.”

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