Nirmala Sitharaman urged to defer move to raise GST on railway products

COIMBATORE: The Railway Suppliers Association (RASA) has urged Union finance minister Nirmala Sitharaman to defer the recent decision of the government to increase Goods and Services Tax (GST) on

railway products

from 12% to 18 %.

The finance ministry on September 30 made the announcement to increase GST from existing 12% to 18% for all railway products covered under chapter 86.

In a letter to the minister, RASA president

S Surulivel

said that small industry suppliers would be affected by the decision with the escalating raw material cost which has increased cost of manufacturing by 25-40%.

When manufacturers are demanding cancellation of orders or for re-fixing the delivery date without penalty, the increased GST amount will not be reimbursed by railways if the supplies are affected beyond original delivery date. The small industries now stand to incur further loss, according to him.

“We request that 18% GST for railway products shall be made effective from April 2022. The deferral will help small industry suppliers plan better and allow them sufficient time to complete existing orders without further loss,” said Surulivel.