Shivkasi in Virudhunagar district of Tamil Nadu is the largest fire manufacturing cluster in India. It has a turnover of over Rs 3,000 crore annually and provides employment to more than 8 lakh people in the region.
Before GST was introduced, only 50 factories of the region paid both VAT and the central excise tax collectively paying up to 27% in the tax system. Rest of the factories fell under the Rs 1.5 crore turnover bracket and hence only paid only the 14.% VAT. But after the implementation of GST, both the small and big factories will have to pay a total of 28% GST.
Ahead of the latest update in the tax system on the midnight of 30 June, the Sivakasi had announced an indefinite shutdown. The strike lasted for six days and the production will restart its production from Thursday, as the government of Tamil Nadu has assured to find a solution for their problem.
Asaithambi, president of Tamil Nadu Fireworks and Amorces Manufacturers’ Association said that “We have pulled out from our stance upon assurances that Tamil Nadu will strongly support our case at the GSTN Council meeting.” He also said that though the the strike was called off only on he assurance of the government that it will put in efforts to solve the problem, the government had not made any promises to lower the tax rates.