Despite Prime Minister Narendra Modi’s bid to encourage environment-friendly construction products, the Goods and Services Tax Council (GST) has proposed…
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Despite Prime Minister Narendra Modi’s bid to encourage environment-friendly construction products, the Goods and Services Tax Council (GST) has proposed higher taxation rates on bricks made out of fly ash that will lead to the closure of around 20,000 units making the eco-friendly bricks. The Indirect-Tax Council has proposed 12 per cent GST on sand-lime and fly ash bricks, 28 per cent tax on cement bricks, while clay bricks, which are considered to be hazardous to the environment, have been kept at the 5 per cent slab.
The PM had recently said, “Construction of such iconic buildings on green concept will encourage citizens to take up such construction. The airport is built on the principle of green infrastructure using bricks of fly ash. We would encourage this to grow.”
Bhairub Mall, president, Association of Fly Ash Products Manufacturers (AFAPM), told The Statesman: “We have made various representations to the Finance Ministry, Commerce Ministry, GST Council and the PM's Office, but we are not being heard. We only want a level playing field between sand lime-fly ash bricks and red clay bricks. Why is a higher tax rate imposed on environment-friendly products?”
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There are now around 20,000 fly ash brick plants in the country, out of which more than 250 plants are in Delhi-NCR. They make 30-35 lakh bricks per day in a shift. Mall said this eco-friendly product can offer employment opportunities to more than 20-crore people.
The GST Council is meeting on 3 June to finalise tax rates on a few commodities like biscuits, footwear, jewellery and bidis. The Council, that uploaded the tax schedule on its website on 18 May immediately after approving it, said the list will be subject to further vetting during which it may undergo some changes. That gives hope for industries seeking concessions.
Other sectors like biscuits are seeking exemption only in the case of the lowest priced category which is widely consumed, not in higher priced categories.
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