GST Has Made Ceramic Tile Business A Level-Playing Field, Say Dealers 

Organised ceramic tile dealers say the Goods and Services Tax has created a level-playing field as the nationwide levy doesn’t allow distributors to undercut prices by not offering invoices and getting paid in cash.

Unorganised dealers contributed 60 percent of the sales before GST, a survey of 20 ceramic tile distributors in 10 states by BloombergQuint revealed. Smaller and regional distributors were forced to clean up their act after GST, dealers of Kajaria, Cera and Somany branded tiles told BloombergQuint. According to the government, it is difficult for anyone to push undeclared goods into the value chain as it will break the input tax credit chain.

Sales, which were disrupted in June and July because of GST, have increased in August. Volumes are picking up, driven by demand in the north, west and central regions. Dealers expect the August volumes to grow 15 percent over the previous month.

Tiles are taxed at the highest rate of 28 percent under GST, compared to 27-29 percent earlier. The pre-GST rate was lower in Gujarat, Madhya Pradesh and Chhattisgarh at 17-19 percent owing to a lower VAT. As a result, prices of tiles sold by organised dealers rose by 5-10 percent in the three states, while they remained largely unchanged in the rest of the country. On the flip side, prices of tiles made by smaller and regional companies rose 30-40 percent in July.