Over 500 small-scale detergent manufacturers in Gujarat have written to the Union government requesting it to lower the Goods and Services Tax (GST) imposed on the industry to 5 per cent from the present 18 per cent.
“The government is currently working on rationalising GST and we have written to the Centre requesting the MSME units having a turnover of upto ₹100 crore to be included in the 5 per cent slab. This will make us competitive against the multinational companies and their brands which are fast expanding into the rural markets where we operate,” the Chairman of Gujarat Small Scale Detergent Manufacturers Association (GSSDMA) said.
High GST rates and an inverted dirty structure are creating severe working capital and competitiveness issues for MSME manufacturers. Products under HSN 3401 (soaps and organic surface-active products) and HSN 3402 (detergent powders, cakes, liquids) are currently taxed at 18 per cent GST. Additionally, high import duties on key raw materials such as LAB, fatty alcohols, surfactants and packaging materials have escalated production costs. Multiple overlapping compliance requirements further add to the burden of MSMEs.
“The large-scale detergent and soap manufacturers are able to procure raw materials at cheap rates from the market. Any reduction in GST rates will make us competitive,” he added. The association has also sought “special subsidies, working capital support for MSMEs, enhanced rebates under the government schemes and single window clearance system to ease compliance and eliminate red-tape.
