Reduce 18 per cent GST slab, demand matchbox makers

It was unfortunate that the low-priced consumer commodity was included among others, including fire crackers and cigar lighters, under the 18 per cent GST bracket, said J Devadoss, secretary, South India Match Manufacturers Association. Unlike other consumer products, matchboxes were the lowest-priced product, sold at just Re 1. 

“While fire crackers, which have become expensive, and cigar lighters fall within the tax slab of 18 per cent, the one-rupee matchboxes too have been kept under this slab,” he said on Sunday. In the wake of the GST roll out, market price of all consumer products had risen, but the market value of the matchbox remains the same. 

If the 18 per cent GST was lowered to 12 per cent, its market price would remain the same even for the next 20 years to benefit the Indian population of about 135 crore, he said. It was with the advent of the safety match industry, developments in the form of civilisation, economy and education witnessed a big change in the once drought-prone areas of Kovilpatti, Ettayapuram, Kalugumalai, Sattur and Sivakasi, he told DT Next. 

Moreover, the manufactured safety matches had been contributing in a big way to foreign exchange earnings. “Foreign exchange revenue figures show Rs 400 crore on average a year from exports,” Devadoss said. All these factors were cited at a GST open house meeting at CODISSIA in Coimbatore on September 20, he said.  

According to M Paramasivam, president, National Small Match Manufacturers Association, both production and sale of the product suffered a decline of late. While production declined by 20 per cent, its market has dwindled by 30 per cent. Since its overseas shipments dipped, stocks of finished goods accumulated, adding to the difficulties in the domestic market too. About 20 per cent of the total production would be shipped mostly to African countries, but not even 10 per cent of the goods have been exported so far.

The exports suffered a blow due to bottlenecks in export policy, which needs to be sorted out. Problems also exist in importing softwood as restrictions were imposed on this key raw material. To prevent any spread of pest from such softwood, importers were instructed to strip off bark. Moreover, the industry, which largely relied on Kerala for procurement of raw material such as wood, suffered yet another blow as the neighbouring state was hit by floods and is recovering gradually from the devastating impact, Devadoss said.