 "If GST tax is capped at 18-20%, it will benefit chemicals industry: Ajay Durrani")
The Goods and Services Tax (GST) is one of the most significant reforms introduced in the history of the Indian fiscal evolution. It is definitely a progressive and pragmatic approach to taxation that will improve ease of doing business in the country. That being said, the government could only muster consensus on the nature of levies that shall be subsumed in the GST. There is no consensus on the final GST rate; which is key to determine the impact.
Nevertheless, the current tax for the paints and industrial chemicals sector is between 24 per cent and 26 per cent. If the government agrees to cap the GST tax slab in line with the recommendation of the chief economic adviser (18-20 percent), it will have strong positive impact on the sector.
The trickle-down and cascading effects of the GST in other sectors such as logistics, manufacturing, automotive and consumer products too will impact the chemical and polymer industry. Even though the government has assured that the GST Bill will be implemented before the next FY, considering that there are still interrelated procedures that need to be completed successfully together with addressing open issues, the timeline looks quite ambitious. The challenge before Indian Inc., is how to get ready to implement GST, before April 1, 2017.
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Ajay Durrani is the managing director of Covestro India, a part of German polymers and specialty chemicals maker Covestro (formerly Bayer Material Science)
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Ajay Durrani is the managing director of Covestro India, a part of German polymers and specialty chemicals maker Covestro (formerly Bayer Material Science)
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