According to Century PlyBoards (India), the implementation of GST-regime will benefit the plywood industry, there the unorganised sector enjoys an 80% markertshare.
The company is also hopeful that the 18% rate applies to the industry.
“We are hopeful that, being a product for masses, plywood should be in the 18 % bracket,” Sajjan Bhajanka, chairman of Century PlyBoards (India) said. “90% of our raw material base is plantation timber, which is grown in India on agro-forestry basis. Treating plywood at par with luxury goods or white goods is not justified as it is an intermediate product, mostly used for making furniture and house-interiors.”
Bhajanka saw the possibility of migration of good quantity material from the unorganised sector.
In addition, he further explained that while notwithstanding the rate, the GST will create a level-playing field for the sector as the exemption limit is restricted to Rs.20 lakhs pushing most small units out of the exemptions net.
Managing Director Sanjay Agarwal said currently, the two major players in the organised plywood industry – Century Ply and Greenply – pay 30% taxes while unorganised players hardly pay any taxes hence, enabling them to offer their products at cheaper prices. “We expect this scenario to change with the implementation of GST,” Agarwal said.
CenturyPly is also exploring the possibility of entering the Africa market though it is a “challenging proposition,” Agarwal added. “It is a challenging proposition with huge timber resources but also major law and order and logistic problems, with some locations being 1,000 kms from the nearest port.”
Source: The Hindu