GST hike worries wet grinder industry in Coimbatore

At its 47th meeting, the Goods and Services Tax (GST) Council increased the tax imposed on wet grinders to 18 per cent from the current 5 per cent. This is the fourth time that the wet grinder industry is undergoing change in tax slab after GST was introduced in 2017.

From 28 per cent when the GST regime was launched, the tax slab was reduced to 12 per cent and then to 5 per cent by the Union Government. However, the 47th meeting which took place in Chandigarh earlier this week increased the slab to 18 per cent.

The GST council’s decision has come as a shock for the industry, most of which fall under the micro category, which is already facing a stiff challenge from readymade idli and dosa batter that is popular among people.

The industry was already under stress in 2017 when the GST was introduced after the Tamil Nadu government stopped the free wet grinder scheme which helped the manufacturers to make good business with orders for 2 crore wet grinders.

“It is the current finance minister Nirmala Sitharaman who brought down the tax to 5 per cent from 12 per cent. We are at loss to understand what forced her to increase it to 18 per cent. If this slab continues, the industry will not survive for long,” M Raaja, a wet grinder manufacturer, told DH.

R Soundrakumar, President, Coimbatore Wet Grinders Manufacturers’ Association (COWMA) Cluster, said the change in tax slab will push the price of wet grinders anywhere between Rs 600 to Rs 2,000 which will not just affect the end-consumer but also the manufacturers.

He said the wet grinder manufacturers have already suffered losses due to the Covid-19 lockdown.

“We couldn’t sell much of the commercial wet grinders in the past two years due to Covid-19 pandemic as large-scale functions weren’t held. The raw material price hike also pushed the price of the wet grinder. Many scaled down their production. With this increase in tax, we don’t know how we are going to survive,” Soundrakumar told DH.

Wet grinders are sold mostly in south Indian states like Tamil Nadu, Karnataka, Andhra Pradesh, and Kerala. Off late, there is demand for wet grinders in a few north Indian states as well.

Raaja added that the 28 per cent tax forced many to leave the business. “But we persuaded the Union Government and brought the tax slab to 5 per cent. That helped many to continue with their business and then came Covid when our production stopped. We have just started to walk on our feet again and this increase has come out of the blue,” he said.

Coimbatore is the only city in the country that manufactures wet grinders as the stone used is available here in a radius of about 100 kms from the industrial city.