Railway Supplier Association Against Increased GST Rate

The Railway Suppliers Association has told the Union government to examine the GST rate on all railway products. As the prior order dated September 30, 2021, the ministry of Finance had raised the rate to 18% from 12%.

S.Surulivel, president of the Association, said in a press release that the hike was at the “most inopportune time, in respect of small industry suppliers.”

The railway manufacturing organizations issued purchase orders 9 to 12 months in advance. This is why orders for the upcoming year were released last month.

Prices of raw materials have increased 25% to 40% in the last few months and the price differentiation clause is applied only for primary raw materials. Whereas it is not applicable for finished goods. The railway suppliers who took orders prior to September 2021 at the prices that triumph then is experiencing loss now. Later after the hike in transport costs and the effect of lockdown, the element supplying units were hit hard. These units are looking for cancellation of orders and analysis of prices without fine.

In this scenario, the government has enacted the GST. The increased GST (Goods and Services Tax) amount will not be refunded by Railways in case the supplies are affected beyond the fixed delivery date. Therefore, the government should defer the increase to 18% to next April and open the units to accomplish the existing orders without experiencing loss, he said.