High VAT rates hit Meerut carrom board hub | SupportBiz

Vertical View

High VAT rates hit Meerut carrom board hub

The carrom board manufacturing industry in Meerut is facing major problems due to the increase in VAT rate on the purchase of plywood. The rise in inflation is another major concern for the industrialists.

There are over 100 units in the industry, where  about 1,000 people work. The collective annual turnover of the cluster is over Rs. 10 crore.

“Meerut is a big cluster for making carrom boards for the past many years,  which has been steadily growing.  We export our products to various countries  like USA, England and South  Arabia ,” says  Sunil Sharma, General Secretary,  All India Sports Goods Manufacturers Federation.

“The government  imposed  VAT at the rate of 14%  on the purchase of plywood during the last quarter of the year 2012.  Earlier,  VAT was imposed at the rate of just 5%.  This  increase in the VAT rate has caused major problems for the manufacturers,” he says.

“The higher VAT rate has  increased the cost price of our products, but we have had to sell our products at the prices  we had already committed to sell for. We  have not been able to increase the prices of the products for which we had already taken  orders. This has caused us  significant losses, ” says Rajat Kumar, one of the manufacturers.

“Even the price of thinner has increased from Rs. 20 to Rs. 50. The prices  of polythene and  polish have also increased from Rs. 102 and Rs. 60 to Rs. 130 and Rs. 200 respectively. This has reduced our purchasing power,” says  Sharma

“The carrom boards whose prices  ranged between Rs. 95 and Rs.2,100 last year are now being sold at prices ranging from Rs. 120  to Rs. 3,000,”  says Sharma.

“Many  clients have refused to pay the increased prices  for carrom boards.  We are not in a position to  increase prices, and have to bear  losses,” says  Kumar.