Tribune press service
Solan, October 3
The makers of corrugated boxes in Himachal Pradesh opposed the GST council’s decision to increase the rate from 12 to 18 percent on corrugated boxes, paper and cardboard.
The 45th GST Council Meeting proposed to increase the GST on corrugated boxes from 12 to 18 percent on cartons, boxes, paper packaging containers, etc. The council, while clarifying the increase, said this was done to remove ambiguity and a uniform rate of 18 percent was offered on all paper and cardboard packaging, whether corrugated or not.
It will negatively affect business
- A representation was given to the Minister of Finance of the Union
- Manufacturers want state government to raise issue with GST board at next meeting
- A 6% increase in the GST rate on corrugated boxes will have a debilitating effect on our business.
- They further stated that the GST on corrugated boxes has been 12 percent since its inception and is comparable to that of its main raw materials, paper and kraft board.
The Federation of Corrugated Box Manufacturers of India said it was unfair to increase the GST on corrugated boxes used in the packaging of various products like apples. State President Surinder Jain said, “Increasing the GST rate from 12% to 18% will have a spiraling effect on the price of products like apples and other fruits that are packaged in these boxes.”
Representation was also given to the Union Minister of Finance in Panchkula. Manufacturers want state government to raise issue with GST board at next meeting
Jain added that âCorrugated box makers have been battling a sharp rise in the price of kraft paper for two years. A 6% increase in the GST rate on corrugated boxes will have a debilitating effect on our business.
Investors said the GST on corrugated boxes has been 12% since its inception in July 2017 and is comparable to its main raw materials, paper and kraft board. Since kraft paper makes up almost 76 to 80 percent of the finished box, any increase in the box tax will significantly increase the box tax rate.
âNot all users of corrugated cardboard boxes such as fruits, vegetables, many pharmaceuticals, food products, alcoholic beverages, etc. are subject to the GST. The increase in the GST rate will therefore increase the price of these products and place an undue burden on manufacturers, âJain added.
The manufacturers claimed that they were MSMEs and that many of them were micro and small businesses in the industry. âThis increase will affect the market’s cash flow. Previously, 3% cash flow from sales was required, but the new development will bring it to 9% and no customer will offset this additional financial cost. “