The imminent roll-out of the Goods and Services Tax (GST) is unlikely to bring in either higher prices for consumers or result in any major supply disruption, said Abhijit Roy, the new president of the Indian Paint Association.
Addressing a press meet here, he said that while the industry pitched for 18%, the rate had been pegged at 28% for the paints industry, except for powder coatings (a speciality paint used on household appliances, gadgets and also automobiles), which would attract 18%. The present taxation rates are a tad higher, he said.
It would be a loss to all if some States failed to roll out the new indirect tax system in tandem, he said. “It will be a loss for everyone... consumers, companies..,” he observed. Pointing out that bigger paint dealers were likely to be better prepared for the rollout, he said no supply disruption was expected beyond 45 days. On the impact of GST on the unorganised paints industry, Mr. Roy said that eventually every one would have to “fall in line.”
Nearly 30% of the ₹40,000-crore paint industry was with the unorganised sector, which did not pay most of the taxes, he claimed. “There may be some teething problems, but everyone should realise that the benefits of the reform were linked with compliance,” he observed.
Outgoing president Jalaj Dani said that the paints and coatings sector was still being considered a discretionary sector which depended on consumers’ spending propensity. Mr. Roy projected a 10% volume growth in the current fiscal year.
