Andhra Pradesh

GST adds to woes of decorative slate industry

Survival blues Slate industry is now focusing on value addition to be in the reckoning.

Survival blues Slate industry is now focusing on value addition to be in the reckoning.   | Photo Credit: Kommuri Srinivas

Aesthetic construction material used for flooring, wall cladding

Markapur town in Prakasam district is famous not only for the grandiose Chennakesava Swamy temple, but also a flourishing slate industry.

When the demand for conventional roofing material declined with people going for concrete structures, the industry reinvented itself by producing and exporting the decorative slate tiles of various sizes to, among other countries, the U.S. and Europe. The aesthetic construction material is mainly used for flooring and for wall cladding.

But with the advent of the porcelain tile from countries like Italy and China, there has been reduced demand from abroad of late for the elegant construction material, forcing the industry to fall back heavily on the domestic market.

Now the Goods and Services Tax(GST) has come at an inopportune time for the over eight decade-old industry which focuses on value addition to be in the reckoning, says a group of entrepreneurs at the APIIC Industrial estate struggling to tide over the crisis.

“We have no grouse against paying 5% GST on regular cut slate tiles. But it is 28% GST on value-added worked slates, which is hurting us,” says Slate Industry Owners Association President Prasad Gupta in a conversation with The Hindu. These elevation products were taxed only at 12.5% earlier. The Centre should reduce the GST on agglomerated tiles to at least 12% if not 5% for the survival of the industry, he adds.

In 1991, the industry employed almost 6,000 workers in about 1,300 units. But only about 50 units are operating in the decorative slate cluster of the APIIC, says its Secretary V. Poli Reddy. “If the Union and State governments fail to provide hand-holding support to the crisis-ridden industry, the existing units will also collapse sooner than later,” he adds.

The 33% contribution to the District Mineral Fund (DMF), after paying a royalty to the State government at the rate of ₹150 per tonne, proves to be an additional burden, feels another functionary Ramesh Reddy. It should be brought down to 12% on par with the one collected from the granite units.

Only in May, wages of workers taken on contract basis had been revised upwards to keep them in good humour, say the entrepreneurs who also face shortage of workers since the launch of the Mahatma Gandhi National Rural Employment Guarantee scheme (MGNREGS). The only solace for them is the 24 x 7 power supply ensured by the present TDP government.

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Printable version | Jun 1, 2020 3:23:05 PM |

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