The decision of the Goods and Services Tax (GST) Council to tax paints at the highest slab of 28 per cent would not differ from the existing rate which was just above that, the paints industry has said.
“It is no loss, no gain situation for the paints industry. At the existing rate structure, taxes on paints come to just above 28 per cent,” newly-elected president of Indian Paint Association (IPA) Abhijit Roy said.
Roy, who is also the managing director of Berger Paints, said that what the government had done is to keep the rates effectively the same.
“Our expectation was that the GST rates will be fixed at the lower slab of 18 per cent since paints is required for protection against corrosion”, he told reporters in Kolkata on June 7.
Power coatings have been placed at the 18 per cent bracket, he said, adding that it constituted a small percentage of the overall paints industry size.
Roy said although paints would be taxed at 28 per cent, there would be no cess as it had not been classified as a luxury good.
Asked whether there would be disruption as the government was keen to implement GST from July one, 2017, Roy said there could some temporary disturbances initially which would die down shortly after its implementation.
Roy said sales might also suffer during that period of disruption, adding that companies having inventories of more than one year would also incur some losses.
It was unlikely that GST rate of 28 per cent would have any impact on demand.
Source: Business Standard
