Bengal Brick-field Owners’ Association urges govt to reconsider the GST rate hike on sale of red clay brick

The red clay brick manufacturing sector, a Small Scale Rural Cottage Industry, is the determining factor of rural economic growth. The sector is a major employment generator and Government revenue earner.Bengal BrickField Owners’ Association (“BBFOA”) represents the entire redclay brick sector of West Bengal since 1942.

Unfortunately, the GST Council, Government of India, has in September 2021 proposed exorbitant hike in GST on sale of red clay brick – (i) from 5% to 12% i.e. by 140% with Input Tax Credit (“ITC”) facility under Regular Scheme and (ii) from 1% to 6% i.eby 500% without ITC facility under Composition Scheme. (iii) The Floor of Regular Scheme has been lowered arbitrarily from annual turnover of Rs.1.50 Crore of brick-field to Rs.20 lakh. The proposed tax rates will be applicable w.e.f 1/4/2022.

(i) The proposed GST  rates  are  arbitrary,  unjustified  and  unilateral  –thrust by the Government without discussion with red clay brick sector – reflects dictatorial, non-democratic action of a democratically elected government.

(ii)    For other industries the floors of Regular Schemes have been retained at higher turnover levels than for clay brick industry –Government action is discriminatory, targets the rural industry instead of extending support.

(iii)  Red clay brick sector is paralysed by a number  of issues  – acute  crisis of coal, steep rise in coal price and prices of other raw materials, sharp fall in clay brick demand post Covid-19 recession in construction industry etc. But, instead of resolving problems the Central government is up to milking the sector.

(iv)    BBFOA strongly protests against the proposed GST hike and seek immediate roll back of the proposal. BBFOA members from allover West Bengal will stage a ‘DHARNA’ protest in New Delhi in front of Jantar Mantar on 8/3/2022, under the umbrella of the All India Brick & Tile Manufacturers Federation (“AIBTMF”).

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