Paint has a noteworthy contribution to real estate and automobile divisions, but the GST rates burden was the main cause of its slowdown after its implementation. The market for paints in India is relied upon to develop at 1.5 times to 2 times GDP in the following five years.
With GDP development anticipated that would be between 6-7 per cent, the main three players are probably going to clock above industry development rates, later on, considering they have a solid brand and great reach.
Read Also: Paint Industry To Grow 10-15% With Revised GST Rates
The market size of the paint business in India is evaluated at around Rs 350 billion. While the industry players anticipate that in the nearby future, 12% development in business volume has to come.
The overall development of the country may or may not affect the paint industry but going by the standard of the housing development, it is said to increase on a yearly basis.
Even after the housing sector makes proper use of the paint and varnishes, there is another sector which relies upon the paint is the automobile industry.
After the boom of multiple colour selection and preferential car colours, there is a defined growth in the paint industry with various industries relying upon it.
Current Situation of the Paint Industry
According to the 28th GST council meeting, the GST rates have been reduced on the paints from 28 per cent to a lower 18 per cent, a straight cut of 10 per cent making it a positive decision.
The rate reduction has made a higher projection of sales i.e. 10 to 15 per cent in the fiscal year of 2018-19 which is higher than the previous year’s growth of 9 per cent.
Vice president of the Indian Paint Association stated “We expect 10-15% growth in sales in this fiscal, [in] the decorative paints segment. We have urged members to lower the MRP. The lowering of the rate is likely to boost [sales].”
However, there are issues related to the input price and the surge in prices twice in a year due to the hike in raw material price which otherwise depends on the price of crude oil.
Even the Kotak securities went ahead to say that the paint industry is set to earn 10 to 15 per cent more than the previous fiscal year on the account of rate reduction.
It is time to avail higher profits than before as many of the international research agencies have stated that the rate reduction would actually bring higher sales than earlier.
GST Rate and HSN Code for Paint Products
| Description | HSN Code | GST |
|---|---|---|
| Dispersion paints | 32099010 | 18% |
| Emulsion paints not specified elsewhere or included | 32099020 | 18% |
| Synthetic enamel, ultra-white paints | 32089021 | 18% |
| Enamels | 32089029 | 18% |
| Lacquers | 32089030 | 18% |
| Colour lakes, preparations based on colour lakes (as specified in Note 3 to this Chapter) | 3205 | 18% |
| Paints and varnishes (including lacquers and enamels) based on synthetic or chemically modified natural polymers, that are dispersed or dissolved in a non-aqueous medium; Solutions defined in Note 4 to this Chapter | 3208 | 18% |
| Paints and varnishes (including lacquers and enamels) based on synthetic or chemically modified natural polymers, that are dispersed or dissolved in an aqueous medium | 3209 | 18% |
| Paints, varnishes, enamels, lacquers, and distempers that are not based on synthetic polymers or chemically modified natural polymers. Additionally, prepared water pigments that are specifically used for finishing leather. | 3210 | 18% |
| Pigments, including metallic powders and flakes, that are dispersed in non-aqueous media, in paste or liquid form, of a type used in the manufacture of paints and enamels; stamping foils; dyes and other colouring matter put up in forms or packings for retail sale | 3212 | 18% |
| Students, artists, or signboard painters colours, amusement colours, modifying tints, and the like, in tubes, jars, tablets, bottles, pans, or in similar packings or forms | 3213 | 18% |
| Students, artists, or signboard painters’ colours, amusement colours, modifying tints, and the like, in tubes, jars, tablets, bottles, pans, or in similar packings or forms | 960340 | 18% |
This is wonderful. Indian paint industry should definitely rise soon. Thanks!
SHOW WITH EXAMPLE IN A BILL EITHER PURCHASE OR SALES WITH PAINT MATERIALS
SHOW WITH EXAMPLE IN A BILL EITHER PURCHASE OR SALES WITH PAINT MATERIALS
SSIs enjoy nil duty upto Rs 1.5 crores. What will be the likely impact, decrease in profits if they are to compete with companies already paying duty.