Move to hike GST on pumps stumps bicycle industry – ET Auto

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Ludhiana: The decision to hike GST on several products and services by the GST council in its recent meeting at Chandigarh have upset industries in Ludhiana. In a major setback for the bicycle industry, the rate of GST on the bicycle pumps has been recommended to be hiked from present 12% to 18%.

The decision, which will be applicable from July 18, has caused huge uproar in the bicycle industry. Businessmen said the rate of pump will increase by Rs 10-12 per piece and it will put burden on poor people who are the major clients of this product.

Leading tax expert from city N K Thamman said, “At present, bicycle and its parts attract 12% GST and similarly, bicycle pumps which is an accessory attracted same rate of 12% GST. But now GST council has recommended to increase GST rate on bicycle pumps by 6%. As per the information shared by GST council, this rate has been increased to remove inverted duty structure since steel basic raw material of these pumps attracts 18% GST. In Ludhiana, there are several bicycle pump manufacturers, and bicycle industry itself is very large and this development therefore is very crucial for the industry.”

Kulpreet Malhotra Bunty, managing director of Malhotra Cycles, said, “The proposed increase of GST from 12% to 18% on bicycle pumps will deal a huge blow to sale of pumps which are already registering a fall due to several reasons. This 6% hike of tax will lead to increase of Rs 10-12 per piece in the rates of pumps, which will cost Rs 236 to Rs 265 in the wholesale market. This will hit the poor people the most who own bicycles and buying pump is also necessity for them. This is a very bad move by the GST council.”

Inderjit Singh Navyug, former president of United Cycle and Parts Manufacturers Association, said, “It is very disappointing that instead of giving us relief in tax rates, the GST council hiked the rate of GST on bicycle pump which is a necessary item for a poor man. This move will not only increase the investment of manufacturers and traders dealing in pumps, but will also put an additional load on the sellers and buyers.”

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