Tamil Nadu Micro and small-scale industries urge Centre to address disparities in GST  

CHENNAI:  Even as the Centre celebrates the 5th anniversary of the goods and services tax (GST) rollout, micro and small-scale industries in Tamil Nadu urge the government to address discrepancies in the tax structure. 

Auto-component manufacturers in the Hosur region said they’re levied 18-28% GST as automobiles come under luxury products. How a small unit with three labourers producing spare parts is taxed under luxury items, asks Gnanasekaran of Hosur Small and Tiny Industries Association (Hostia). 

“There is a mismatch between the tax rates of our raw materials and our finished products, making it difficult for us to claim an input tax credit (ITC). We buy raw materials at 18% and sell our products at 28%. In some cases, we get the additional 10% of the taxes after 90 days till then we have to get money from banks and money lenders. This is increasing our cost up to Rs 50- 80 lakhs per year,” he said.

They said even after multiple representations to Finance Minister Nirmala Sitharaman, the issue is not resolved. The Hosur region has nearly 3,000 MSMEs involved in auto component production. They supply components for TVS and the Ashok Leyland, among others. 

Industry representatives request the government for monthly filing and quarterly payment of GST for small and micro industries. “This would reduce the compliance burden and improve the financials of the SMEs,” said S Vasudevan, vice-president (Chennai region) of Tamil Nadu Small and Tiny Industries Association (TANSTIA). 

Healthcare sector wants GST cut
Healthcare providers in the state say that imposition of GST would be difficult to implement and the tax burden will increase cost of healthcare. Dr Ilankumaran Kaliamoorthy chief executive officer of Rela Hospital, said hospitals can’t avail of input tax credit (ITC) for purchase of drugs, using housekeeping and security services for the hospital so it would be passed on to the patients. “In tier- 2 and tier- 3 cities the cost of the rooms would be probably less than `5,000 but in cities like Chennai where the cost of living is high, it will impact the urban population more,” he said.  The industry has raised demand before the government to revisit the tax structure stating that double taxation would affect the very reason GST was introduced. Recently, the GST Council has decided to impose 5% GST on hospital beds with rents above `5,000 a day without ITC. ENS