The GST for Railway items has been hiked at most inopportune time, in respect of small industry suppliers. Already the small industry is affected by the price increase of all raw materials. They requested the Minister for Finance to consider the above facts and defer the GST increase proposal. They requested that 18% GST for Railway products shall be made effective from 01.04.2022.
Coimbatore: The Ministry of Finance, vide its Notification No. 8/2021 (integrated tax) dated 30.09.2021 has increased the GST to 18% (from 12% GST) for all Railway Products covered under chapter 86. The GST for Railway items has been hiked at most inopportune time, in respect of small industry suppliers.
Raw material price increase
Already the small industry is affected by the price increase of all raw materials. The railway manufacturing organizations usually release purchase orders, well in advance 9 to 12 months before their actual consumption date. Purchase orders, for the items required during 2021-2022, were issued almost before September 2021.
Since September 2021, the prices of every basic raw material have increased. The manufacturing cost of products has increased by 25% to 40%. The price variation clause is applicable only for basic raw material supply and does not apply for finished products. The Railway suppliers who took orders before September 2021, at the prices prevailing then, are now incurring heavy loss, to complete the supply.
Pathetic situation
The abnormal Raw material price increase, 2 months closure of industries due to coronavirus lockdown and increase in transport cost have already wrecked havoc on small industries. Due to heavy loss, small industries are unable to supply orders in time. They requested the railway organizations either for cancellation of orders or for re-fixing the delivery date without penalty.
Losses multiply
In this precarious situation the GST has been hiked to 18% . The increased GST amount will not be reimbursed by Railways if the supplies are affected beyond the original delivery date. The small industries now stand to incur further loss. They said they are struggling for survival.
They requested the Minister for Finance to consider the above facts and defer the GST increase proposal. They requested that 18% GST for Railway products shall be made effective from 01.04.2022. They said deferral will help small industry suppliers to plan better and allow them sufficient time to complete existing orders without further loss.
Raw material price increase
Already the small industry is affected by the price increase of all raw materials. The railway manufacturing organizations usually release purchase orders, well in advance 9 to 12 months before their actual consumption date. Purchase orders, for the items required during 2021-2022, were issued almost before September 2021.
Since September 2021, the prices of every basic raw material have increased. The manufacturing cost of products has increased by 25% to 40%. The price variation clause is applicable only for basic raw material supply and does not apply for finished products. The Railway suppliers who took orders before September 2021, at the prices prevailing then, are now incurring heavy loss, to complete the supply.
Pathetic situation
The abnormal Raw material price increase, 2 months closure of industries due to coronavirus lockdown and increase in transport cost have already wrecked havoc on small industries. Due to heavy loss, small industries are unable to supply orders in time. They requested the railway organizations either for cancellation of orders or for re-fixing the delivery date without penalty.
Losses multiply
In this precarious situation the GST has been hiked to 18% . The increased GST amount will not be reimbursed by Railways if the supplies are affected beyond the original delivery date. The small industries now stand to incur further loss. They said they are struggling for survival.
They requested the Minister for Finance to consider the above facts and defer the GST increase proposal. They requested that 18% GST for Railway products shall be made effective from 01.04.2022. They said deferral will help small industry suppliers to plan better and allow them sufficient time to complete existing orders without further loss.