Tue Sep 10 23:33:43 UTC 2024: ## MSME Representatives in Coimbatore Demand Lower GST Rates

**COIMBATORE, INDIA (September 10, 2024):** Representatives from Micro, Small and Medium-scale Enterprises (MSME) in Coimbatore met with officials from the Ministry of MSMEs on Tuesday, demanding a reduction in GST rates for various products manufactured by their units.

The meeting highlighted several key issues facing the MSME sector in the region. Mithun Ramdas, president of the Southern India Engineering Manufacturers’ Association, cited the recent increase in GST on pumpsets to 18% as a major factor driving a significant portion of the industry into the unorganized sector. He claims that the unorganized sector’s share of the ₹25,000 crore pumpset industry has risen to almost ₹15,000 crore due to the higher GST.

Further concerns were raised about the logistical challenges faced by industries in South India due to the high cost of transporting raw materials from Northern states. The NSIC’s raw material scheme was deemed unhelpful as it requires advance payments and bank guarantees.

Representatives from the textile industry advocated for raw materials like cotton and manmade fibers to be made available at internationally competitive prices, noting that current prices in India are higher.

Foundries and engineering industries that export castings and machined parts also voiced concerns about the recent imposition of 18% GST on tools used for specific customer orders. These tools, which are unique to each customer and not exportable, were previously not taxed.

J. James, president of the Tamil Nadu Association of Cottage and Tiny Enterprises, highlighted the long-standing demand for a reduction in GST on job work to 12% or a tax deduction at source for orders placed by larger industries with micro units.

The meeting concluded with a call for a separate classification or board for micro and tiny units, as the current MSME definition based on investment and turnover does not provide adequate benefits for these smaller enterprises.

The meeting provides a clear indication of the challenges facing the MSME sector in Coimbatore and the need for government intervention to address these issues.

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