GST Troubles: Hyderabad Industries Urge Reforms Amidst Rate Anomalies

The bustling industrial landscape of Hyderabad is currently abuzz with pressing concerns as two pivotal sectors—paper merchants and elevator manufacturers—raise their voices against existing Goods and Services Tax (GST) anomalies. Their pleas, directed at the highest echelons of the GST Council, underscore a vital need for rationalization to foster fair competition and support vital industries.

For the paper industry, the current GST structure presents a tangled web of complexities, primarily revolving around the elusive Input Tax Credit (ITC).

Merchants are facing significant hurdles due to the disparate GST rates applied to various types of paper, ranging from 12% to 18%. This inconsistency creates a cascading effect, making the reconciliation of ITC a cumbersome and often unrewarding task. Compounding their woes is the perplexing situation where finished goods, such as notebooks, attract a 12% GST, while the very raw material—paper board—was initially taxed at a higher 18%.

Although some adjustments have been made, the underlying disparity continues to pinch, particularly affecting the numerous Micro, Small, and Medium Enterprises (MSMEs) that form the backbone of this sector. Industry representatives are vehemently calling for a unified and simplified GST rate structure, advocating for a single slab that would not only streamline operations but also alleviate the financial strain on businesses.

Meanwhile, the elevator manufacturing sector is ascendant with its own compelling argument for GST reform.

Currently, lifts are categorized as luxury items, subjected to a hefty 18% GST. This classification, industry leaders argue, is starkly out of sync with the modern urban reality, especially in rapidly developing cities like Hyderabad where vertical living is the norm. They contend that elevators are no longer a mere indulgence but a fundamental necessity, particularly for the elderly, individuals with disabilities, and families residing in multi-storey buildings.

The manufacturers highlight a striking paradox: while affordable housing projects benefit from a reduced GST rate of 12%, the elevators installed within these very structures are taxed at a higher rate. This discrepancy inflates costs and hinders accessibility. Their impassioned appeal seeks a significant reduction in GST for residential lifts, proposing a rate of 5% or, at the very least, alignment with the 12% rate applied to affordable housing.

Such a move, they argue, would not only support the growth of the construction industry but also enhance the quality of life for countless urban dwellers.

As these industries voice their collective concerns, the call for a more pragmatic and equitable GST framework grows louder. The representations made by both paper merchants and elevator manufacturers are a clear signal to policymakers: a nuanced approach is required to ensure that tax policies genuinely support industrial growth and consumer welfare, rather than inadvertently creating bottlenecks and financial burdens.

The ball is now in the GST Council’s court to address these critical anomalies and pave the way for a more streamlined and industry-friendly tax regime in Hyderabad and beyond.