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Morbi’s clock industry seeks GST relief in wake of coronavirus pandemic


Date: 10-04-2020
Subject: Morbi’s clock industry seeks GST relief in wake of coronavirus pandemic
Already hit by recession and now by the nationwide lockdown, the over Rs 800-crore clock industry based in Morbi wants at least 50% reduction in goods and service tax (GST) in order to survive the post-lockdown period, as well as to retain an almost 20,000-strong workforce employed in the India’s largest cluster of clock manufacturing.

Over the past half century, the clock industry has flourished in and around Saurashtra’s Morbi town and manufactures more than 90% of the clocks produced in India. Nearly 180 clock and clock-part makers have created a unique ecosystem for the entire clock value chain and created employment opportunities for local people, especially women, as over 80% of the employees working in these units are women.

Currently the clock industry is paying as high as 18% as GST, says Shashank Dangi, president of Clock and Parts Manufacturers Association of Morbi, adding, “The clock industry is passing through a tough time since the past six months.” Dangi added that now, the coronavirus pandemic has created an added burden. “Most of the clock units want to retain their employees even after the lifting of the lockdown. But at the same time ,we want government support in terms of reduction of GST by at least 50%.”

According to Dangi, except four-five big units, most of the clock and parts makers are MSMEs and they wound not be able to survive if the government doesn’t give direct benefit in taxes, as they are already facing stiff competition from cheaper, imported Chinese clocks.

The clock makers also want anti-dumping duty on Chinese clocks and clock parts. Currently, only 10% import duty has been imposed on clock and clock parts, says Jayesh Shah, chairman and managing director of one of the biggest clock manufacturing units in India, Sonam Clocks. Shah believes that if anti-dumping duty is imposed on cheaper Chinese products, local industry would automatically benefit.

Currently the clock industry is paying as high as 18% as GST, says Shashank Dangi, president of Clock and Parts Manufacturers Association of Morbi, adding, “The clock industry is passing through a tough time since the past six months.” Dangi added that now, the coronavirus pandemic has created an added burden. “Most of the clock units want to retain their employees even after the lifting of the lockdown. But at the same time ,we want government support in terms of reduction of GST by at least 50%.”

According to Dangi, except four-five big units, most of the clock and parts makers are MSMEs and they wound not be able to survive if the government doesn’t give direct benefit in taxes, as they are already facing stiff competition from cheaper, imported Chinese clocks.

The clock makers also want anti-dumping duty on Chinese clocks and clock parts. Currently, only 10% import duty has been imposed on clock and clock parts, says Jayesh Shah, chairman and managing director of one of the biggest clock manufacturing units in India, Sonam Clocks. Shah believes that if anti-dumping duty is imposed on cheaper Chinese products, local industry would automatically benefit.
Essential components required for clocks such as cabinets, dials, hands and other parts are being manufactured at Morbi but some vital electronic components like IC quartz crystals (integrated circuit) for clock movements are still being imported from China and some other countries. Recently, Sonam Clock and a couple of other units have started making clock movements.

There are a plethora of units which make unbranded clocks. However, large players such as Ajanta India, Oreva Group, Sonam Clock and Rikon Clocks Manufacturing Co produce 15 million clocks per annum.

The Morbi clock industry exports nearly 10% of its total turnover of Rs 800 crore to nearly 30 countries, mostly in the Middle East and African nations. Sonam Clocks has a lion’s share of over 30% in India’s total exports.

Export orders taken before the spread of the coronavirus have luckily not been cancelled, says Shah, adding that they are however unable to send shipments in the wake of the lockdown and there are problems of labours as well as transportation.

Interestingly, even before the lockdown was declared, the Morbi clock industry voluntarily decided to close all units from March 21 till March 31. As the lockdown period was announced till April 15, the industry decided to remain shut till further notice from the government.

Source:- financialexpress.com

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