In the market price of Rs 300 for a bundle of 600 boxes each, Rs 20-22 is tax. Evading this amount in a loss-making industry will have a tremendous impact in the retail market. This anomaly is destroying the industry, according to Sriram Ashok, director of Sundravel Match Industries, Sivakasi, and president of the All India Chamber of Match Industries.
The inflow of matches from Pakistan is another threat the industry will have to face very soon. The only answer to save the labour-intensive essential industry is a total tax waiver or a very low level of duty without exemption, S Ashok, vice-president of the Chamber and director of Asia Match Co Pvt Ltd, Sivakasi, told FE. The highly fragmented Rs 2700-crore match industry in the country now falls into three categories of tax exempted, tax paying, and tax evading groups. Evasion is worth over Rs 120 crore and the government is turning a blind eye on it, allowing a slow death of genuine tax paying companies, Ashok said.
Alternatively we request a reduction in the rate of Cenvat to 4% from 12% without any exemption. This will discourage match manufacturers from evasion, encourage more voluntary compliance, and save over 3 lakh workers in the organised sector, Sriram said.