According to The Times of India, after Goods and Services Tax (GST) was implemented in the country in July, demand for timber took a huge hit, and industry players are estimating that their orders have been slashed by nearly half.
With plywood placed under a 28 per cent taxation, demand for timber, as well as timber products, have fallen some 40 per cent.
While the demand for timber usually takes a little dip around this time of the year due to the monsoon, industry players have indicated that the demand has further fallen this year as compared to the same period in 2016, pushed down by the spike in timber prices as well as plywood.
“After implementation of GST, the tax on plywood has become 28 per cent,” Manish Shah, a plywood trader, told The Times of India. “The increase in tax has led to tremendous confusion among customers who are deferring their purchases. Demand has been affected significantly and we hope it recovers soon.”
“There is a significant difference between the tax rates of timber products,” Alay Nagori, president of the Ahmedabad Timber Merchants Association (ATMA), said. “While traders will still benefit with input tax credit, for the end-consumer, products will be costlier by an estimated ten per cent.”
Source: The Times of India