Industries against 18% tax on job-working engineering units.

In the western districts of Coimbatore, Tiruppur and Krishnagiri, the adverse impact of the rollout of the Goods and Services Tax (GST) regime in July 2017 on the micro, small and medium enterprises (MSMEs) has become a key issue in the election season.

The 18% GST on job-working engineering units had pushed several micro and small industries out of business. The units need to pay the tax every month. But they get payments from larger units for the job work after three or four months.

“There is higher demand for capital and we are struggling without it. Many of us have been in the business for the last 25 to 30 years and cannot shut shop now. But, there is no profit in business,” laments K Maniraj, president, Kovai Power Driven Pumps and Spares Manufacturers Association. These industries had been seeking a reduction of GST to 5 % for job-working engineering MSMEs.

“We had made several representations to the BJP-led government at the Centre and to the State government. But we are yet to get the issues resolved. The unit owners have individual political preferences. So we are awaiting what assurance each candidate in Coimbatore will give and decide on extending our support accordingly,” Mr. Maniraj said.

His association had earlier threatened to field its own candidate to take on the nominees of established political parties in the Lok Sabha elections if the parties did not spell out in their manifestos on accepting the demand of the industry to reduce the GST.

CPI (M)’s promise

Mr. Maniraj said that the association had submitted its demands to some of the political parties. “We were expecting the political parties to announce solutions to our problems in their election manifesto. So far, only the CPI (M) candidate in Coimbatorek, Natarajan, has said that he will work towards reducing the GST for engineering MSMEs,” he said.

Some days ago, the Hosur Small and Tiny Industries Association had said MSMEs (employees and owners) in Hosur would boycott the polls if the GST is not rolled back for the units. K. Velmurugan, president of the Association, said the GST in the current form was “anti-MSMEs” and discouraged self-employment.

“They (the Government) do not understand the issues we are facing. Even the Opposition parties are not taking up the issue,” he complained.

Hosur has over 3,000 MSMEs and a large number of them supply components to original equipment manufacturers and tier-one suppliers to the automobile companies. Irrespective of whether these industrial associations would or not be in a position to influence the voting choice of the workers, the fact remains that the industry had suffered a slowdown on account of the GST regime.

Published On : 25-03-2019

Source : The Hindu