Sawn Timber and Face Veneer will be unaffected

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The GST rate on Sawn Timber and Face Veneer is reported to be proposed in 18% slab, which will help this sector to become formal. Experts say that India consumes huge quantity of sawn timber supplied by thousands of saw mills (big and small) located pan India. Most of the saw mills are SSI units and are mainly driven by informal sector but the implementation of GST will tighten them to work in organized manner. The timber and face attracts 18 percent slab that will provide a cushion to plywood, door, furniture and other organized segment furniture manufacturer a cushion as they can have a higher input credit. Although the cost of sawn timber may witness an increase of 5 percent though the prices might remain stable due to subdued demand.

India saw mill sector is mainly depend on imported logs, and approx 7 million cubic meters timbers are being imported in India where as there are thousands of mills who process seasonal wood from local regions. Although timber traders opines that GST burden will increase to those states consumers, where the current VAT rate is 5%, and prices will go up in many states such as in Delhi, MP, etc. The face veneer sector will be benefited and grow further because majority of plywood units will become under organized system within a year. India’s plywood sector is now mainly depend on imported face veneer from Myanmar, Gabon, Indonesia and Vietnam that offers a complete input cost set off for plywood units thus supporting them to absorb higher GST rate. Prices of face veneer will remain same unchanged under proposed GST rates of 18%.

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