Morbi’s Clock Industry Seeks at Least a 50% Reduction in GST Relief

There are a number of companies that make a plethora of unbranded clocks units. And some well-known brands like Ajanta India, Oreva Group, Sonam Clock and Rikon Clocks Manufacturing Co produce around 15 million of clocks per annum. Just like any other industry in India, clock industry was going through a recession and now due to the nationwide lockdown, over Rs, 800-crore clock industry based in Morbi wants a reduction of at least 50% in goods and service tax (GST) in order to survive the post-lockdown period and to retain an around 20,000-strong workforce employed in India’s clock manufacturing industry. Meanwhile, at the present time, the industry is paying as high as 18% as GST, and that’s why Morbi wants this reduction.

The clock industry has fully grown in and around Saurashtra’s Morbi town and proudly manufactures more than 90% of the total clocks produced in India. From here, nearly 180 clock and clock-part makers managed to stable a unique ecosystem for the entire clock value chain, and while doing that they also managed to created employment opportunities for local people, especially women. It is noticeable that over 80% of the employees working in these units are women and they are doing best in this industry.

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Shashank Dangi, president of Clock and Parts Manufacturers Association of Morbi said that “the industry is paying as high as 18% as GST, at the present time the industry is passing through a tough time since the past six months. The coronavirus pandemic has created an added burden. Most of the clock units want to retain their employees even after the lifting of the lockdown. But at the same time, we want government support in terms of reduction of GST by at least 50%.”

Dangi further added that “except four-five big units, most of the clock and parts makers are MSMEs and they would not be able to survive if the government doesn’t give direct benefit in taxes, as they are already facing stiff competition from cheaper, imported Chinese clocks”.

The clockmakers of this industry also requesting anti-dumping duty on clocks and clock parts imported from China. Jayesh Shah, chairman and managing director at Sonam Clocks stated that “At the present time, only 10% import duty has been imposed on the clock and clock parts, so if anti-dumping duty is imposed on cheaper Chinese products, the local industry would automatically benefit”. Meanwhile, Sonam Clock is one of the biggest clock manufacturing units in India, it also has a big part of over 30% in India’s total exports

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At Mobi, most of the essential clock components such as cabinets, dials, hands and other parts are being manufactured from half of the century. However, some vital electronic components like IC quartz crystals that are necessary for clock movements are still being imported from China and some other countries. It is a great update that Sonam Clock and a couple of other units have started making clock movements in recent year.

The industry actually exports around 10% of its total turnover of Rs 800 crore to nearly 30 countries, from these the Middle East and African nations are the big importers.  Jayesh Shah added in his statement that “Export orders received before the coronavirus outbreak have luckily not been canceled, but they are however unable to send shipments in the wake of the lockdown and there are problems of labors as well as transportation”.

It is important to mention here that the Morbi clock industry closed all units from 21st March till 31st March, it is even before the lockdown was declared. Now when the government announced the lockdown period till April 15, the industry decided to remain closed till any further government notice.