Pen Manufacturers Under Pressure Due to GST & COVID-19 Pandemic

The pen industry is facing double problems of Rs 2000 cr due to ongoing covid-19 and from the GST said the officials. The pen manufacturer states that 18 % GST has been imposed by the central board of indirect taxes “Recently, many of the exporters have come under the tracing radar of tax authorities in India for claiming the tax credit two times for the same export under and customs on the product such as writing instrument components like the cap, clip, and refill. instead of 12% as the standard one declared by them.

Also, they clarified that the current notification about the pen and its manufacturing units do not discriminate between them. “The issue of misinterpretation has come to the fore since early 2020 but the problem escalated during the pandemic. “The industry witnessed a nearly 50 percent fall in demand as the educational institutions remain closed and have opted for the work-from-home concept,” replied the Kolkata Pen manufacturers and dealers associations president Naresh Jain.

On the concern of the pen industry, Vyapar Mandal has given the representation to the Central Board of Indirect Taxes and Customs, addressing them to make it correct as written in the notification says the secretary V K Bansal. It is the duty which provoked the manufacturers to import from foreign rather than make it in the country, says Confederation of West Bengal Traders Association president Sushil Poddar.

“In the government’s app, ‘Niryat Mitra’, the IGST rate for all goods falling under various sub-headings of heading 9608 is at 12 percent. Fountain and stylograph pens attract 18 percent IGST.” declare Jain.

Another rule for GST rate Grab the information of revised GST slab rates on consumer products in India, Although GST council finalized the slab rates like 5%, 12%, 18% and 28% and customs notifications also says that 12% rate on the components excluding the fountain and stylograph pens, he declared, by saying that a similar tax format has been followed since VAT administration. The input tax credit in the GST system will be availed by the pen makers and thus taxation problems will not assist the government in raising funds.

“As it takes a year or so to get the input tax refunds, the high tax pay-out could create pressure on the working capital of manufacturers,” he said.