Manoj Kumar , Sr. General Manager (Sales and Marketing) , Super Cassettes Industries Private Limited
“LED is the prime product having a large potential for expansion. LEDs ranging from 50 cm to 80 cm find a large consumer base due to the expected rationalization of prices.”
Though after independence, introduction and implementation of GST has been a major step toward uniformity and standardization of tax structure across the country to create a common Indian market, improve tax compliance and governance inter-alia to boost investment and growth, but the anticipated apprehension of merits and demerits here and there varying case-to-case and industry-to-industry have come and are coming across the industry and are also being brought to the notice of the Government of India, Ministry of Finance, and other concerned departments for taking appropriate action fruitful to the industry, government, and the consumers (masses).
GST impacts consumer electronics particularly CTV/LED. The CTV segment is already nearing the end of its life and production/sales have already reached the bare minimum. Prior to GST, implication of excise duty/VAT was as under:
Implication of excise duty on 65 percent of MRP at 12.5 percent which finally comes to nearly 7.2 percent after remission of 35 percent of the abatement.
State wise VAT on an average of 14 percent.
Other expenses, such as transportation, insurance etc. are same as applicable pre-GST and post-GST.
As such from the regime of excise and vat the tax liability amounted to 21.5 percent whereas in the regime of GST the liability is to the tune of 28 percent. As such addition of tax implication comes to nearly 6.8 percent.
We have five slabs of GST rates as against universally prevailing two to three slab rates. CTV/LED is not an item of luxury but a necessity. CTV particularly 36 cm in size should be in the reach of masses living in clusters/rural areas under poverty or below poverty, who cannot afford LED costing `10,000 and above, whereas a small 36 cm CTV is available for less than `4000. GST on CTV and LED at the same rate is disproportionate on the basis of its value as well as the category of the people using CTV and LED. GST of 28 percent on CTV at par with LED needs to be reviewed and reconsidered.
Government of India is keenly focusing on Make in India and thrust is on electronics and consumer electronics in particular. This segment is free from any type of pollution and capable of creating mass employment through small-, medium-, and large-scale industries.
LED is the prime product having a large potential for expansion. LEDs ranging from 50 cm to 80 cm find a large consumer base due to the expected rationalization of prices. In the larger interest of industry, GST rates need to be reviewed favorably for LED.
Notwithstanding the small anomaly in GST on consumer electronics for LED and CTV, the concept of GST is a widely welcome step both from the industry inter-alia from consumers. Plethora of paper work and procedural difficulties is likely to be weeded out and wherever prevails government would take suitable action for its reformation from time to time.