From July 1st, the Indian coating industry will usher in a new era of consumption tax. Powder coatings KO water-based coatings

Since the Chinese government implemented the consumption tax policy on some coatings products in February 2015, the entire industry has been greatly affected. The coating industry has been affected throughout 2015. Taxes and surcharges increased by 720 million yuan, a year-on-year increase of 35%. In 2016, industry taxes and surcharges increased by 340 million yuan, an increase of 12%. The implementation of the two-year consumption tax policy is driving the industry’s product structure to low VOCs. Content coating transformation.
From July 1, 2017, the coating industry in India is also facing a new era of consumption tax. The overall tax rate for the coating industry 28% (this is the highest grade under the new Indian tax law, which is the luxury tax rate)-even for water-based paint, however, powder Paint products are kept at the 18% tax rate!
According to India’s Coatings Industry Association, domestic coating prices are expected to remain stable under the new Goods and Services Tax (GST) policy , Because its impact is neutral.
According to the association, the overall consumption tax rate of the Indian coatings industry is expected to be 28% under the new policy, and the current effective tax rate is calculated to be about 29%, of which the consumption tax accounts for 12.5%, and the additional value-added levied by the provinces of India The tax is 12.5% ​​to 14.5%, and the coating manufacturer will also pay an additional 1.67% value-added tax on the basis of the consumption tax.
At present, India’s domestic decorative coating products account for about 70% of the total value of the country’s coating market of 403 billion Indian rupees, while powder coating products account for about 3% to 4% of the total value. .
“On the whole, it is expected that the consumption tax will not change the end market prices of coating products, although some dealers will adjust prices,” said Abhijit Roy, the current president of the Indian Coatings Association. The price of coating raw materials has stabilized after rising earlier this year. Acetic acid The increase in the purchase price of raw materials such as vinyl ester monomers and titanium dioxide will force coating companies to increase costs by about 5.5%, but at the same time as Berger in Indiapaint Roy of the company’s managing director and chief executive officer said: “As far as trends are concerned, there will be no changes in paint prices.”
However, the Indian Coatings Association also pointed out that it is expected that at least one month after the introduction of the consumption tax, the Indian coatings industry will still be under certain pressure. However, industry insiders believe that dealers and retailers who are not yet the best prepared to deal with the new consumption tax system will be ready by July 1.
“Even if there is a short-term decline in demand, this shortage will be compensated in the next few months. After all, the Indian market has strong demand,” said SMahesh Anand, President of Decorative Coatings Business of Nippon Paint (India) Co., Ltd.
According to Jalaj Dani, the former president of the Indian Coatings Association and a former board member of the Indian Asia Coating Company, the current output growth of the Indian coatings industry is about 10%, and the sales growth is about 15%. .
“We need to see how the consumption tax is implemented. After all, some companies in the domestic coatings industry in India have been evading taxes and may continue to do so,” Roy said.