Portal snag puts jute mills in a quandary

Supply of sacks, cash flow affected

Workers are busy in making diversified products at Hukumchand Jute Mill which is located near the bank of river Hooghly

Problems in the ‘Jute Smart’ portal in the post-GST scenario has led to cash flow problems for mill owners on one hand, while creating problem of supply of sacks on the other.

‘Jute Smart’ is a digital platform under the Jute Commissioner that brings together manufacturers, indenting agencies, transporters and inspection agencies.

Although the mills resumed supplies after a temporary shutdown between June 27 and July 3, they started encountering problems regarding non-receipt of their dues, mill-owners said.

Under the mandatory jute packaging order, 90% of food grains and 20% of sugar are to be packed in jute sacks, accounting for 60% of the offtake. Through their procuring agencies, State governments place orders through this portal.

The mills initiate supply as per the orders and after the inspection agencies have certified the quality. Thereafter, the payment is deposited with the JC, who then releases it. However, although the mills resumed supplies after a temporary shutdown between June 27 and July 3, they started encountering problems regarding non-receipt of their dues, mill-owners told The Hindu .

When contacted, Deputy Jute Commissioner Dipankar Mahto said that the problems had been sorted out and the portal had been made ready for the post-GST scenario. He, however, indicated that certain clarifications had been sought on the freight issue.

‘Problems persist’

Subhakirti Majumdar, director general of industry apex body Indian Jute Mills Association, said while the JC’s office was trying to set matters right, jute mills had not been getting payments against supplies. The mills get paid daily for their supplies, while the labour gets paid twice a month. “We have already faced problems regarding payments on July 15,” a mill-owner said, adding that cash flow is needed to be maintained to buy raw jute also. In some cases, this has already begun to reflect on supplies.

While the GST rate has remained at 6% for jute sacks, problems have arisen over the rates for services like freight and handling.

“As there is lack of clarity on the Goods and Services Tax to be charged on freight bills, we request you to kindly accept value bills from respective jute mills... so that jute mills could be reimbursed,” Mr. Majumdar had said in a letter to Mr. Mahto last week. The IJMA said that it had flagged the issue of invoicing challenges due to GST implementation in June, 2017 with the Jute Commissioner’s office.