Centre urged to reduce GST on HSN 9988 job order services

COIMBATORE: The Chinnavedampatti Industrial Association (CIA) has urged the Centre to reduce the GST rate of HSN 9988 job order services (manufacturing services on physical inputs (goods) owned by others) to 5%.In a letter to chief commissioner of the central goods and services tax (CGST,) Coimbatore region, CIA president N Deva Kumar stated, “This reduction is essential to protect MSMEs, safeguard employment, and sustain the industrial growth of Coimbatore – one of India’s most important MSME hubs.”The letter said the CIA welcomed the recently announced new GST framework (2-slab system), indicating a positive step towards industrial growth and consumer welfare.However, it said, “The revision of GST rate for job order services (HSN 9988) from 12% to 18% is a matter of serious concern for MSMEs in Coimbatore. Thousands of MSMEs engaged in machining, fabrication, grinding, motor & pump components, and engineering ancillaries will be severely impacted.”Highlighting the impacts of this revision, he noted that MSMEs would face severe cash flow stress due to higher upfront GST payments.

“Passing the higher costs to customers will be difficult, resulting in loss of competitiveness and potential order cancellations. Demands will be sifted in sense, the risk of job work orders being diverted to other regions with lower costs is high after the revision.”