By Songbedna Bauri: As India Inc is already reeling under the pressure of higher interest rates, the recent surge in the excise duty and service tax to 12% as compared to 10% is effecting the Indian SMEs in a big way, according to industry bodies.
Various industry bodies such as Faridabad Small Industries Association, Federation of Karnataka Chambers of Commerce and Industry,The Sports Goods Manufacturers and Exporters Association participated in an industry roundtable organised on the sidelines of IndiaMART Emerging Business Forum yesterday in the national capital.
Representatives from these associations believe that Union Finance Minister Pranab Mukherjee took up a big step in the direction of a unified Goods and Service Tax (GST). Now, most services, except for 27 types that are part of the negative list, are under this tax ambit.
Although India's industrial growth rose to 6.8% during January, it is feared that the economy is not out of the clutches of slowdown yet. Few sectors, like automobile witnessed decline in sales and rise in excise levy is impacting the demand heavily.
The various industry bodies, which spoke about the status quo in excise duty and service tax rates, are not happy with the move.
Reports suggest that both excise and service tax hike is increasing the cost of businesses by more than 20% in India.