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Firework units in Tamil Nadu begins indefinite strike to protest levy of 28 per cent GST

Firework manufacturing units and firework dealers in Tamil Nadu, began an indefinite strike in protest against levy of 28 per cent Goods and Service Tax (GST) on the firework products.

Firework units in Tamil Nadu begins indefinite strike to protest levy of 28 per cent GST
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File photo of a buyer purchasing firecrackers during Deepavali season last year

Virudhunagar

Over 811 licensed firework units affiliated to Tamil Nadu Fireworks and Amorces Manufacturers' Association (TANFAMA) and The Indian Fireworks Manufacturers' Association (TIFMA) stopped their manufacturing activities, while 600 cracker retail shops downed their shutters from this morning, seeking reduction in the GST on firework products from the present 28 per cent to 12 per cent, K.Mariappan, Secretary of TANFAMA told newsmen.

The indefinite strike will affect the livelihood of eight lakh workers depending on the firework industry in the State.

Mariappan said most of the cracker units comes under Small-Scale Industry (SSI) and are labour-intensive. It would be highly impossible for the units to pay 28 per cent GST. Hence, the firework factories, majority of them located in and around Sivakasi in Virudhunagar district have decided to begin indefinite strike a day prior to the implementation of GST.

He said the tax reform will decimate the business of cracker industry, especially small manufacturers at the time when the firework manufactures are facing several ordeals for the past three years. Out of the total licensed units, only 51 big units pay 12.5 per cent Central Excise and others did not pay this as they come under the SSI, and their annual turnover is below Rs 1.5 crore. However, all the units pay Value Added Tax (VAT) of 14.5 per cent.

The GST flattens this tax structure and brings the SSI units on par with big units. If the new slab of GST is implemented, the price of crackers will increase by atleast 40 per cent. While the aim of Central government of implementing GST is one nation, one tax, the firework industry is at a disadvantage as it is facing stiff competition from illegally imported Chinese crackers that attract no duty and no tax, he said. 

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