Kolkata, Nov 14 (PTI) With rationalisation of Goodsand Services Tax (GST) from 28 per cent to 18 per cent onplywood, organised industry players of this sector are hopefulof increasing their marketshare.
The average growth rate of the industry which wasabout five per cent till now was expected to grow at least by25 per cent year-on-year, industry sources said.
Century Plyboard MD Sanjay Agarwal said, at the sametime it would be "wrong to believe" that the players of theunorganised plywood sector will be "washed out" with therevised GST rate effective from tomorrow, It was perceived that the unorganised plywood sector,which accounts for 70-80 per cent of the estimated Rs 20,000crore industry, would bear the brunt in the GST regime.
Agarwal told PTI, "GST rate rationalisation will bringmassive change for the organised sector of the industry whichaccount for just 20-30 per cent of the estimated Rs 20,000crore market.
"But, it would be wrong to believe that theunorganised sector will be washed out with the reduction of 10per cent in GST rate from 28 per cent." Post rationalisation of tax, the industry would growat least 25 per cent year-on-year, Agarwal hopes.
The plywood associations had been demandinga reduction in the GST ever since the new tax regime had beenintroduced.
The GST Council on November 10 decided to lower thetax rate on 178 items, leaving just 50 items in the top 28 percent rate slab under the Goods and Services Tax.
Agarwal pointed that the price gap between organisedand unorganised playboards will get squeezed to about 20 percent down from 30-35 per cent, helping large plyboard makersto grab larger marketshare.
Tax avoidance was the major reason for competitivenessin the industry dominated by the unorganised players.
Greenply, Century Plyboards, Kitply, National Plywoodand Uniply are the major players in the organised sector.
The items in wood panel industry are plywood, blockboard, decorative ply, medium density fiber board (MDF),particle board that will be benefitted.
Agarwal hoped that old stock would not be a majorhurdle for retail customers to get benefit of the taxrationalisation with effect from November 15. PTI BSMMM.
This is unedited, unformatted feed from the Press Trust of India wire.