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Service tax a blow to granite industry
The granite quarry owners in the State are surprised and shocked when they received notices from the government to give the production between April 2016 and June 2017. The authorities mentioned that they are going to impose a service tax on the seigniorage fees for the duration. The quarry managements are getting ready to file a primary objection in a few days.
Ongole: The granite quarry owners in the State are surprised and shocked when they received notices from the government to give the production between April 2016 and June 2017. The authorities mentioned that they are going to impose a service tax on the seigniorage fees for the duration. The quarry managements are getting ready to file a primary objection in a few days.
Highlights:
- 18 per cent later on quarry managements The Centre proposed to impose 15 per cent of service tax between April 2016 and June 2017 and
- served to quarry owners to provide details of service tax paid by them between April 2016 and June 2017 Notices have been
- The government is getting about Rs 120-150 crore royalty from the granite companies every year
The granite industry is concentrated in Prakasam, Guntur, Chittoor and Visakhapatnam districts. The Prakasam district has about 400 granite companies with a holding of 1,200 mining quarries while the number of cutting and polishing industries reached 4,000 with more than 50,000 workers dependent on the industry.
The government is getting about Rs 120-150 crore in the name of seigniorage fees which is also called royalty from the granite companies every year. The MSME granite units, which enjoyed waiver of taxes up to the introduction of GST, are burdened with the tax but the large-scale units enjoyed a relief.
The MSME owners already complained to government that the GST will benefit the large industries to reduce the price and affect the livelihood of MSME owners.
Now, the Indirect Taxes department of Central government sent notices to the quarry owners to provide details of royalty paid by them between April 2016 and June 2017.
The Centre proposed to impose 15 percent of service tax in the said period and 18 percent later. MA Azeem, general secretary of the Galaxy Granite Owners Association said, “The service tax proposed is retrospective. If they wanted to impose it, they should have announced it ahead to that period so that we could have increased the prices to meet the taxes.
Since a decade, the granite prices are not changed much but we are seeing a tremendous hike in the cost of production as the prices of tools, spares and salaries are increased. We are going to file a preliminary objection on notices served by the government.”
The MSMEs also opposing the service tax as it will affect them also. Linga Ramakrishna Reddy, proprietor of Raja Rajeswari Rocks said, “The service tax is going to be an additional burden to all of us. After GST, we have increased the price of product by 28percent. But, lost considerable business as the customers are moving to alternate product. Now, the service tax will increase the prices further and force a lot of units go out of business.”
By Naresh Nandam
