The Railway Suppliers Association (Rasa) has urged Union finance minister Nirmala Sitharaman to defer the recent decision to increase goods and services tax (GST) on railway products from 12 to 18%. The finance ministry had on September 30, 2021 made the announcement to increase GST for all railway products covered under chapter 86.
President of Rasa S Surulivel said in a letter to the minister that small industry suppliers will be affected by the decision with the escalating raw material cost, which has increased the cost of manufacturing by 25-40%. “When manufacturers are asking for cancellation of orders or for re-fixing the delivery date without penalty, the increased GST amount will not be reimbursed by railways if the supplies are affected beyond original delivery date. Small industries now stand to incur further loss,” he said.