Plywood Demand Slowing As Industry Lobbies For Tax Cut: BloombergQuint Survey
Demand for plywood seen slowing in September
Plywood demand slowed down in the first half of September with builders and contractors delaying purchases as the Rs 19,000-crore industry lobbies with the government to bring down the rate of Goods and Services Tax.
Volumes declined 5 to 10 percent year-on-year, a BloombergQuint survey of 25 dealers across 10 states revealed.
Plywood is taxed at the highest 28 percent GST. Lower value-added tax in Madhya Pradesh, Chhattisgarh, West Bengal and Uttar Pradesh pushed up prices by at least 5 percent after GST was rolled out. Prices did ease in southern and western states where total pre-GST levy was up to 33.5 percent. The industry now wants the government to bring GST down to 18 percent.
Prices for smaller and regional distributors have increased by up to 20 percent, dealers said. The nationwide levy has increased compliance and makes it harder to push products without invoicing. Many dealers have been forced to shut shop, the survey found.
Demonetisation and GST, however, helped organised manufacturers and dealers, who account for 30 percent of the plywood industry, brokerage IIFL said in a note.